CHARLES L. SCHULTIZE, chairman of the Council of Economic Advisers, is not know as a special fan of the snail darter or of endangered species in general. And it was a concern for dollars, not for the darter, that caused Mr. Schultze and the rest of a toplevel federal panel to vote Tuesday against letting the Tennessee Valley Authority finish the controversial Tellico Dam. Of Course, the panel knew that its decision would preserve the snail darter's Little Tennessee River domain; the conflict between the dam and the darter had brought the review about. But the point is that the panel did not make its judgement on those limited grounds. Instead, it scrutinized the whole Tellico project and concluded that, in Mr. Schultze's words, "It doesn't pay."

No matter how they calculated the pluses and minuses, the group came out at the same place. Would the benefits from the dam and reservoir, mainly in recreation and economic development, exceed the costs of finishing the dam and flooding nearly 10,000 acres of prime famrland? The answer was no. Then would the reservoir be much better, or less of a net loss, than writing off the $22.5 million already spent on the dam, letting the river flow freely and developing the valley's economic, recreational and cultural potential another way? Again, the answer was no.

The outcome should not be a great blow to TVA. Since David Freeman took charge last year, that agency has moved away from its old dam-the-darter attitudes and begun exploring alternatives for the valley. Tellico's supporters in Congress have been jolted, however. Arguing that the endangered species law was being misused to block a project with great economic worth, Sen. Howard Baker (R-Tenn.) and other champions of the dam were instrumental in modifying the law last year so that economics and other factors could be weighed. Now their project has failed the test they created.

Sen. Baker has reacted with anger. He is talking about abolishing the new review process or seeking a special exemption for this dam. But it's hard to see how he could find much support for either move now that the project has been scrutinized and found wanting. He would do better to accept the panel's verdict and join MR. Freeman, Interior Secretary Cecil D. Andrus and state officials in working out a better plan.