Water & Drought

California’s drought adds $2 billion in electricity costs

In this January 2014 photo, a sparse amount of snowfall surrounds the Union Valley powerhouse at the base of the Union Valley dam in El Dorado County. The drought is reducing hydroelectric supplies, which usually provide about 15 percent of the state’s total, forcing utilities to find alternative sources.
In this January 2014 photo, a sparse amount of snowfall surrounds the Union Valley powerhouse at the base of the Union Valley dam in El Dorado County. The drought is reducing hydroelectric supplies, which usually provide about 15 percent of the state’s total, forcing utilities to find alternative sources. Sacramento

It’s one of the lesser-known costs of California’s drought: the drying-up of the state’s normally abundant cheap hydroelectric power.

A hydro shortage has raised California’s electricity costs by a combined $2 billion the past four years, according to a report released Tuesday by the Pacific Institute, a water policy think tank based in Oakland. In addition, the institute said the drought has contributed to climate change: California’s fossil-fuel power plants have increased greenhouse gas emissions by 10 percent to make up for the hydro shortage.

The financial impact on individual consumers hasn’t been huge. SMUD, for instance, raised residential rates an average of $1.22 a month last spring to compensate for the hydro shortage. That’s amounted to a 1.3 percent increase for the typical household, said Christopher Capra, spokesman for the Sacramento Municipal Utility District.

Nonetheless, it’s clear the drought has robbed California of one of its cheapest electricity sources. Hydro typically costs 2 cents per kilowatt-hour, according to SMUD, about half the cost of power from natural gas plants. A household uses about 750 kilowatt-hours monthly.

During a normal year, hydro can account for as much as 18 percent of the state’s power supply. That figure has fallen to 10.5 percent during the drought, including a low of 7 percent last year, according to the Pacific Institute’s report.

Other Northern California utilities have raised rates to compensate for the hydro shortage. Pacific Gas and Electric Co. imposed a 1.5 percent increase beginning in January 2014, which was reduced to 1.4 percent last year. Roseville Electric put in place a 2 percent surcharge starting in July 2014, although spokeswoman Vonette McAuley said the surcharge was reduced slightly last summer.

With Northern California experiencing a wet winter so far, it’s possible ratepayers could get a break. Capra said SMUD plans to withdraw its rate increase if the region gets “median or above precipitation” this winter.

“It’s looking good,” he said.

PG&E said it won’t offer a prediction until it has a better idea in the spring about the size of the Sierra snowpack.

“We’re only halfway through the wet season,” said utility spokesman Paul Moreno.

Dale Kasler: 916-321-1066, @dakasler

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