The allocation of joint costs in multiple-purpose hydro-eletric projects

Public development of the water resources of drainage basins for flood control, navigation, eletric power and other useful purposes raises the question as to how the joint costs are to be allocated among the serveral complemantary utilities. The non-vendible character of certain utilities renders allocationj by reference to a free market impossible. The intangible nature oof certain benefits, the generality of their indicence and the probability that their relative velues may change considerably over the life of the project make it difficult to allocate joint costs on the assessment pricniple. No objective formula is possible; joint costs must be allocated by reference to social policy. The logic of the situation supports a policy of charging all, or at least a large part, of the joint costs to the general public revenue in the same way as other social services. Eletric power produced by such projects tends to be priced on a by-product basis. Existing private eletric companies, which derive their sole support from the sale of electicity, cannot meet this competition.