Continuation of Funding for Montana's Libby Dam Project--Is It Warranted?

The Army Corps of Engineers is continuing to fund and request funds to install four additional generating units at the Libby Dam in Montana. A previous study by GAO recommended that the Corps of Engineers not proceed with the Libby Project until a new benefit-cost study using proper methodology was performed, including an analysis of peaking alternatives, and such report was submitted to Congress. Although preliminary studies have begun and a supplemental impact statement is being prepared by the Corps, these documents have not been approved by Congress and, in fact, pending legislation has passed the House with the Libby Dam authorization deleted.

An analysis of the project showed that the estimated project cost for the additional generators is about $52 million, and about $21 million will have been expended by the end of fiscal year (FY) 1980. In addition, the Corps is requesting about $10 million for FY 1981 to continue the project. Further, GAO found that the use of the additional turbines and generators in the dam could not serve their full purpose without a currently unauthorized reregulating dam to minimize environmental and safety hazards associated with the operation of the additional generators. Thus, GAO recommends that the Army proceed no further in funding the installations of turbines and generators in the Libby Dam until Congress reaches a decision on the need for the Libby Reregulating Dam.