Two of the outputs of the Toledo Bend Dam and Reservoir of Louisiana and Texas--hydroelectric power and water supply--could be provided in the private sector. The private costs avoided, therefore, constitute the basic benefits for comparison with the costs of these functions to ascertain economic feasibility. The study examines only the hydroelectric power aspect of the multiple-purpose project. The cost estimates, but not the methods, of the original feasibility study have been used in re-examining project benefits and costs. Benefit-cost ratios are computed from three viewpoints: (1) that of the power companies purchasing the Toledo Bend output, (2) that of the two states which build the project, and (3) that of the nation as a whole. It is concluded that direct power benefits justify the costs reasonably allocated to power from the standpoint of the power companies and the two states. From the national standpoint, however, the power phase of the project appears unjustified. The bias favoring construction by local interests is a consequence of their ability to shift a portion of the costs to the nation as a whole. The explanation is found in the tax structures and in disparities among discount rates. (Author)