Drought Has Big Impact on California Power Market

Rain and snow has returned to California, ending the record-setting drought with record-setting precipitation.

The drought led to forest fires, dead orchards, and brown lawns. It also took a big bite out of ratepayers’ wallets and increased global warming emissions, due to the loss of low-cost, zero-emission hydropower.

In a study released April 26 by Peter Gleick—a noted water expert at the Pacific Institute in Oakland—researchers found that lower hydropower production cost California ratepayers almost $2.5 billion in higher power prices, and may have raised power sector carbon dioxide emissions 10%, due to increased output from gas-fired generators (see Figure 2). Gleick’s team used data through September 2016 to calculate the figures.

Courtesy: Pacific Institute

Courtesy: Pacific Institute

California has 14 GW of hydro capacity, with little growth in recent decades due to environmental, economic, and political constraints. While hydro typically supplies about 18% of California’s power, the drought dropped production to as low as 7% in 2015, the driest year of the drought. Hydro output dropped by two-thirds between 2011 and 2016, losing a total of 65,600 GWh of low-cost, zero-emission electricity over the five-year drought.

According to Gleick’s report, the drop in hydroelectricity output was replaced by burning more natural gas, more imports from out-of-state sources, and growing levels of other renewable generation, especially wind and solar. Retail power demand was almost completely flat through the drought, with a 3% dip in 2016.

To calculate the higher cost, Gleick first found the marginal cost of replacement power during the drought, which averaged $35/MWh. Multiplying that by the monthly purchases of replacement power, he found a whopping $2.45 billion in higher costs over the period of the drought.

In a simplifying assumption, Gleick calculated that carbon emissions from in-state generators may have risen 10% due to the drought, assuming all of the replacement power came from gas-fired combined cycle plants. In fact, some portion came from imports, which are not tracked by fuel source, and some from growing wind and solar, which have no emissions.

The closure of the San Onofre Nuclear Generating Station in 2012 also contributed to higher gas generation and imports.


The drought ended with a deluge, as the California monsoon season—just ended—set new records. Snowpack in the Sierra Nevada range is at 180% of normal, the reservoirs are full, and hydro generation is at full tilt.

Pacific Gas and Electric Co. expects a good hydro year. “The snowpack is encouraging, and we’ll be able to capture much of the runoff,” said spokesperson Paul Moreno. “Many of the reservoirs are full now, and we expect them to be full through the summer.”

Even the high-profile failure of the spillway at Oroville, America’s tallest dam, had only a temporary effect on power output. The spillway suffered severe damage after a sinkhole opened up underneath the concrete liner on February 7, causing large portions of the hillside to erode away from the torrents of water coming over. A few days later, the reservoir overflowed, sending water over the dam’s emergency spillway—little more than a rocky hillside—for the first time in its 50-year history.

The set of six generators at the Oroville-Thermalito Complex, totaling 819 MW, had to be shut down during the crisis due to downstream blockage from the shattered spillway. Three 230-kV power lines were also taken out of service.

With the spillway closed, it became a priority to get the generators back online, in order to lower water levels behind the dam. Working around the clock, crews dredged and cleared the pool below the dam, called the tailrace, allowing the generators to phase in operations starting March 6.

Long-Term Trend

Gleick is concerned that the recent drought is part of a long-term trend, influenced by climate change. His report notes that most of the months since the turn of the millennium have been below the long-term average (see Figure 6). The 2012–2016 drought was preceded by the 2007–2009 drought, with only a short respite in between.

Courtesy: Pacific Institute

Courtesy: Pacific Institute

“The biggest factor has been a rise in temperature,” he says. “Precipitation shows no real trend in California, no more or less. But there is a very clear temperature trend, and higher temperatures worsen droughts. They increase evaporation from reservoirs and soils.”

“Higher temperatures also mean more winter runoff, and less spring and summer runoff due to loss of snowpack,” he notes. “That will cause more problems like we saw at Oroville. Reservoirs are designed for a climate that no longer exists.”

The immediate fix, he says, is to change the operating practices, known as “rule curves,” that dictate how reservoirs are filled and discharged. Gleick points out that they were written over 50 years ago. “We have to redesign the system for a new climate. Those rule curves were created based on past climate records and precipitation … and all of those things are changing.”

“An argument could be made that we need more reservoirs but I’m not sure where we’re going to build them. But there should be no debate about revising operations.”

Bentham Paulos is a freelance writer and consultant specializing in energy issues.