Orestimba Creek Feasibility Study - Stanislaus County

Economics Appendix – Draft Report - Orestimba Creek Feasibility Study, Stanislaus County, California – September 2012
Probability Distribution of Damages Reduced
In accordance with ER 1105-2-101, flood damages reduced were determined as mean values and
by probability exceeded. The tables below show the benefits for each alternative for the 75%,
50% and 25% probability that benefit exceeds indicated value. The damage reduced column
represents the mean benefits for each increment and the 75%, 50% and 25% represent the
probability that the flood damage reduction benefits exceed the number in that column for that
increment. For example, Alternative 2, the Chevron Levee, has an average (mean) benefit of
$3.1 million, but a 50% chance that benefits will be greater than $$2.7 million, 75% confidence
that benefits will be equal or greater than $1.3 million and 25% confidence that benefits will
exceed $4.4 million. This range is the probability distribution of damages reduced and
represents the uncertainty in the benefit estimates and incorporates all the uncertainties in
hydrology, hydraulics, and economics in the HEC-FDA model. The uncertainty in damages
reduced should be considered when selecting an optimal plan during the plan formulation
process. Judgment should be used to determine if an alternative meets a reasonable level of
confidence regarding positive net benefits and identifying if changes in net benefits from
alternative to alternative are significant.
Table E- 7: Probability Distribution of Damages Reduced – TOTAL Study Area
October 2011 Prices ($1,000’s), 4% Interest Rate
Alternative
Without
Project
Annual Damage
With
Project
Damage
Reduced
Probability Damage Reduced
Exceeds Indicated Values
75% 50% 25%
1. No Action 5,413 5,413 0 0 0 0
2. Chevron Levee at
112.75ft
3. Chevron Levee at
114.8ft
5,413 2,285 3,128 1,282 2,679 4,363
5,413 2,285 3,128 1,282 2,679 4,363
ES.6
Project Performance
In addition to damages estimates, HEC-FDA reports flood risk in terms of project performance.
Three statistical measures are provided, in accordance with ER 1105-2-101, to describe
performance risk in probabilistic terms. These include annual exceedance probability, long-term
risk, and assurance by event.
Annual exceedance probability measures the chance of having a damaging flood in any
given year.
ES-xiii