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Drought conditions in California and other western states are leading to big cuts in the amount of electricity generated by hydropower plants in the region, according to a report by Moody’s Investors Service.
The plunge in hydropower production has helped fuel a big increase in power prices in the Golden State, which hit their highest levels in five years over the summer, soaring 150% from May to July, according to Moody’s.
The decline in hydropower, and the scramble to replace it with other sources, is putting financial pressure on local hydropower utilities in California and other western states. By contrast, big out-of-state energy companies that sell into the California grid, and which rely on other sources from renewables to natural gas and nuclear, are profiting as demand for their power surges, Moody’s reports.