Environmental constraints impose a cost on hydropower producers. Harpman
(1999) estimated a reduction of 8.8% in the short-run economic value of hydroelectricity
under specific flow constraints on Glen Canyon Dam on the Colorado River. More
recently, Kotchen et al. (2006) carried out an ex post benefit-cost analysis of a dam
relicensing agreement in Michigan and found that the social benefits more than double
the producer costs. In Sweden, a constant flow of 1 cubic meter per second can be worth
about 41,000 US$/year. The magnitude of economic losses in terms of hydropower
production from minimum releases led to the exploration of alternative means other than
water releases from reservoirs to achieving an ecosystem goal, including changes in
channel structure, defined as biotype adjustments (