Jan 10 California power companies may be forced
to rely more on higher-cost natural gas-fired generation in 2014
as record drought conditions are expected to reduce the state's
hydropower output for a third year in a row.
Public power utilities that rely heavily on hydroelectric
generation may be forced to use more expensive power sources,
such as gas-fired plants, and purchase power to make up for any
hydropower shortfall, Fitch Ratings, a credit rating agency,
said in a report on Friday.
Fitch said eight of the 14 public power companies it rates
receive between 10 percent and 32 percent of their power from
hydroelectric resources. Among them is the Sacramento Municipal
Utility District, one of the state's largest power providers.
The biggest investor-owned and public power utilities in
California include units of PG&E Corp, Edison
International, the City of Los Angeles, Sempra Energy
, the City of Sacramento, the Imperial Irrigation
District and the Modesto Irrigation District.
Fitch said hydropower accounted for an above-average 21.3
percent of in-state electricity generation in 2011 before
dropping to just 13.8 percent under drier conditions in 2012.
That corresponded with an increase in gas-fired generation to
61.1 percent in 2012 from 45.4 percent in 2011 .
The California Department of Water Resources (CDWR),
operator of the state water projects, said the state is
currently experiencing record low water conditions, with more
than one-fourth of the October-September water year having
In its first snow survey of the winter, released last week,
the CDWR said it "found more bare ground than snow" and noted
the snowpack's water content was about 20 percent of average for
this time of year.
The last time statewide snowpack was this dry was 2012, when
it also was 20 percent of the historical average. The CDWR said
the readings now and in 2012 were the driest on record.
The CDWR said there is still time for the snowpack to build
prior to the usual peak in early April before melting into
streams and reservoirs used to provide a third of the water used
by California's cities and farms.
"While we hope conditions improve, we are fully mobilized to
take every action possible to ease the effects of dry weather on
farms, homes and businesses as we face a possible third
consecutive dry year," CDWR Director Mark Cowin said in a