Continuing Drought in Western US To Impact California Energy Prices

Nick Eshleman

Extreme winter drought continues to hit the Western United States. California, Western Nevada, and Southeastern Oregon in particular are experiencing persistent high pressure systems resulting in precipitation levels at 50% from the historic averages. Many of these areas are hitting their lowest levels on record, including San Francisco, Sacramento, and Crescent City. Weak precipitation, combined with some of the warmest temperatures on record in many parts of the region, is resulting in significantly reduced snowpack levels in the Cascades and Sierras. The snowpack volume in these areas was 22% of its historical volume as of Feb 17. Current reservoir levels across California average 32% lower than historical norms.

From 2004-2013, hydropower accounted for approximately 20% of California’s in-state generation, but in 2014 that figure dipped as low as 10%. These generation trends are expected to continue in 2015, based on the regional weather patterns. As hydropower is currently the least expensive generation option in CA, it is expected that higher electric generation cost will continue into 2015.

In 2014, CA increased its solar production capacity from 3761 MW to 8,544 MW through the expansion of the Topaz and Desert Sunlight photovoltaic plants, and will be able to use solar generation to account for about 5% of the hydropower shortfall. CA also expanded its natural gas generation capacity last year, and has high headroom in this area. It is likely that the state will use natural gas to cover the additional shortfall. Natural gas accounted for about 60% of the in-state generation in CA last year.

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