For the first time in history, the federal government yesterday ordered the destruction of a hydroelectric dam that its owner wanted to continue to operate.

The Federal Energy Regulatory Commission (FERC), an agency that for much of this century has championed hydroelectric dams large and small, ordered Edwards Dam removed from the Kennebec River in Augusta, Maine, in order to restore the habitat of sea-run fish.

The commission ruled that power produced at the dam "can be easily replaced" and that getting rid of the dam will open up the river for fish and fishermen. "There will be no environmental or social drawbacks," said the commission, which also required the company that owns the dam to pay for taking it out.

Edwards Dam, a scruffy hump of timber and stone, has stoppered the Kennebec since Martin Van Buren was president.

As federal regulators confirmed yesterday, finding redeeming social value in this 160-year-old structure isn't easy.

The dam cheats both fish and electricity consumers while funneling the bulk of its benefits into the pocket of a company that employs just four people. It does not control floods. It irrigates no fields. Its turbines produce one-tenth of 1 percent of Maine's power needs, which is sold at three times the going rate for electricity in the state. And the dam halts upstream passage for nine species of migrating fish.

Even Marc Isaacson, a vice president of the company that owns Edwards, conceded last Friday in an interview in Augusta that "it is hard to make a public-policy argument in favor of this dam."

The federal order is likely to ratchet up pressure across the country, particularly in the salmon-depleted rivers of the Pacific Northwest, for removal of dams that are far bigger and produce vastly more power than Edwards and where the case for demolition is considerably less clear-cut.

"The Edwards decision reflects a change in the way the federal government looks at dams. FERC has recognized that, just like all other things, dams have a finite life cycle," said Margaret Bowman, director of hydropower programs for American Rivers, a Washington-based group that lobbies for free-flowing rivers.

FERC gave the dam's owner a year to file a plan to tear it down.

Edwards Manufacturing, which receives 97 percent of the dam's revenue, plans to appeal the ruling. The city of Augusta, which is a co-licensee of the dam and gets 3 percent of its revenue, has said it would support an appeal. Isaacson said the federal government is attempting to take private property without due compensation.

Three FERC commissioners voted on the Edwards Dam issue, two for removal and one against. Vicky A. Bailey, a Republican, voted against on the grounds that FERC does not have authority to order a dam removed.

Barring a successful appeal, the federal decision means that river restoration efforts across the United States from now on will include an explosive option that until recently had been unthinkable -- dynamiting all or part of a hydroelectric dam.

Dam removal has swung into fashion because of a dovetailing of forces that are historical and regulatory, as well as economic and social. Most immediately, hundreds of the 30- to 50-year licenses that FERC has issued to about 2,000 privately owned hydroelectric dams are now coming up for renewal.

Under a 1986 change in federal law, FERC cannot renew these licenses without subjecting dam owners to a rigorous standard of environmental accountability. The agency must balance environmental damage caused by a dam against the value of the electricity it produces.

In recent decades, research has shown that dams are the leading culprit in pushing many species of salmon and other sea-run fish toward extinction. In most cases, when private dams were first granted licenses, the survival of fish was a secondary issue.

Federal dam engineers were famously hostile to fish. "They made a lot of snide comments about salmon," recalled Milo Bell, a professor emeritus of bioengineering at the University of Washington who invented the fish ladders that were installed in many Northwest dams.

It was not just engineers who ignored fish and believed in the salvific power of dams. In the West during the decades before and after World War II, huge dams on major rivers like the Missouri, the Colorado and the Columbia were popularly regarded as a concretized form of Manifest Destiny. Free-flowing rivers were regarded as wasteful forces to be "tamed" or "harnessed." The official slogan of the Bureau of Reclamation was: "Our Rivers: Total Use for Greater Wealth."

The issue of "greater wealth" has circled around at the end of 20th century to bite private dam owners in their wallets, as deregulation of the electric utility industry and technological innovation has begun to punish some hydro dams with market reality.

In the Pacific Northwest, for instance, privately owned gas-fired turbines sell electricity at roughly the same price as dams operated by the federally subsidized Bonneville Power Administration.

As for Edwards Dam, it has benefited for 14 years from a particularly sweet contract with Central Maine Power. The contract, signed when there were fears of an energy shortage, allowed the dam to gross $2.5 million last year by selling power at triple the cost of electricity now available on the spot market. Central Maine Power has said it will not renew the contract when it expires next year.

Many of the big dams on western rivers are owned and operated by the federal government and are not subject to FERC licensing, which covers dams owned by individuals, utilities or local governments. But the same environmental pressures that led to the demolition order for Edwards are mounting against federal dams.

Most significantly, there is a scheme to breach four large dams on the lower Snake River in Washington State. These dams, which are marginal contributors to the hydropower grid in the Northwest but are essential for barge navigation on the Snake and Columbia, are blamed by biologists for all but wiping out several species of salmon that spawn in Idaho.

An eyebrow-raising cost-benefit analysis, published this fall by the Idaho Statesman newspaper in Boise, found there is money to be made in junking the four dams. The study said the region would realize a net gain of $183 million a year. Breaching the dams would mean tearing out part of their earthen sections. The concrete spines of each dam, with their turbines and generators, would be left high and dry, like obsolete factories.

"It may not be pretty, but for the fish traveling downstream it will be a river," said Bowman of American Rivers. "We are realizing that dam removal is often less expensive than leaving a dam in place and building fish passage through it."

Edwards Dam is a good example. FERC determined it would cost $10 million to build a fishway into the dam, which it estimated was about 1.7 times the cost of simply tearing the structure down.

Pressure to remove Edwards Dam began building more than 20 years ago as the Kennebec River was slowly cleaned up under federal and state clean water laws. Until the early 1970s, the river was a multi-purpose toilet, polluted with raw sewage, as well as with industrial waste from pulp and paper mills, including highly toxic heavy metals such as mercury and arsenic. It was barely navigable, choked with logs transported in the river's current. Fishermen stayed away because of frequent fish kills and because the river stank.

Dramatic improvements in water quality and a 1974 ban on log transport opened up the river. The Kennebec has since become one of the better fishing destinations in Maine, especially for striped bass and brown trout. Pressure from fishermen helped persuade Maine politicians to join forces with national environment groups like American Rivers and Trout Unlimited in lobbying for removal of Edwards Dam.

"Getting rid of this dam is the pivot for opening up the entire river," said Stephen Brooke, coordinator of a group that has fought for a decade to get rid of the dam. "When Edwards is gone, the owners of upstream dams have agreed to build fish passage."

Despite the order to remove the dam, there is likely to be a protracted legal battle ahead.

Steve Rafle, a spokesman for Trout Unlimited, said: "It will be a while before the plunger goes down on the dynamite." CAPTION: GOING WITH THE FLOW The federal government is deciding whether to remove several dams, most of which provide very little power at the expense of many dead fish. COMMITTED FOR REMOVAL Maine: * Edwards (Kennebec River) Michigan: * Sturgeon (Sturgeon River) * Stronach (Pine River) North Carolina: * Quaker Neck (Neuse River) Wisconsin: * Woods Creek (Woods Creek) * Pine (Pine River) UNDER ACTIVE CONSIDERATION FOR REMOVAL Washington: * Condit (White Salmon River) * Elsha and Glines Canyon (Elwha River) * Four Army Corps dams (Lower Snake River) Oregon: * Savage Rapids (Rogue River) Colorado: * Glen Canyon (Colorado River) New York: * Station 160 (Genesee River) Maine: * Great Works (Penobscot River) * Brownville (Pleasant River) * Souradabscook (Souradabscook River) Florida: * Rodman (Ocklawaha River) SOURCE: American Rivers CAPTION: Marc Isaacson, a vice president of a dam on the Kennebec River, concedes that "it is hard to make a public-policy argument in favor of this dam." CAPTION: Getting rid of Edwards Dam, says Stephen Brooke, is "the pivot" to opening the Kennebec River to fishing.