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Electricity Monthly Update

With Data for June 2021 Release Date: August 24, 2021 Next Release Date: September 24, 2021

Highlights: June 2021

  • Hot weather led to new 12-month daily peak electricity demand highs in New England (ISONE), New York State (NYISO), and the mid-Atlantic (PJM).
  • New 12-month high wholesale electricity prices set in New England (ISONE) and the Northwest (Mid-C).
  • All fifty states and the District of Columbia saw an increase in retail sales volume in June 2021 compared to June 2020, driven by a reduction in Covid-19 restrictions across the country.

Key indicators

Drought conditions help push western U.S. hydroelectric generation below its five-year range

Source: U.S. Energy Information Administration, Form EIA-923, Power Plant Operations Report.
Note: Data for 2020 and 2021 are preliminary; all other data are final. Western U.S here is defined as the Pacific Contiguous and Mountain Census Divisions. A water year is based on the hydrological cycle that runs from October 1 through September 30.

Persistent drought conditions in the western U.S. have pushed western U.S. hydroelectric generation below its five-year (2015–20) range. We consider the western United States to be the Pacific Contiguous and Mountain Census Divisions. Western U.S hydro generation first decreased below its five-year range in March 2021, when monthly hydro generation in the western United States was at 10,931 gigawatthours (GW), or 10% below the lower portion of the March five-year range (12,102 GWh in March 2020). Western U.S. hydro generation has remained below the five-year range from March to June 2021. On a water year basis (October–September), June year-to-date (YTD) water year hydro generation (112,256 GWh) for the western United States is 17% below the June YTD water year five-year average (135,006 GWh) and 28% below the June YTD water year five-year high (156,598 GWh) that occurred during the 2016–17 water year. A water year is based on the water cycle in that precipitation in the fall and early winter do not affect stream and river flows until the following spring and summer. This pattern is particularly true in the western United States.

Source: National Drought Mitigation Center, University of Nebraska-Lincoln.

The historically low hydro generation in the western United States has been caused, in part, by persistent drought conditions that have reduced water flow rates in the west. As of June 1, 2021, based on U.S. Drought Monitor data, about 65% of the western United States was in Severe (D2 Intensity) to Exceptional (D4 intensity) drought levels. In comparison, 55% of the western United States was in drought levels D2 through D4 at the beginning of the water year (September 29, 2020). In addition, the percentage of the western United States at all drought levels (D1–D4) has gone from 76% at the beginning of the 2020–21 water year to 82% as of June 1, 2021.

Source: U.S. Energy Information Administration, Form EIA-923, Power Plant Operations Report.
Note: Data for 2020 and 2021 are preliminary; all other data are final. Western U.S here is defined as the Pacific Contiguous and Mountain Census Divisions. A water year is based on the hydrological cycle that runs from October 1 through September 30.

The decrease in hydro generation in the western United States during the 2020–21 water year is part of a recent four-year trend of decreasing hydro generation in the West. Hydrogenation in the western United States experienced its recent five-year peak during the 2016–17 water year (200,776 GWh). Since then, western U.S. hydro generation has steadily declined, reaching 164,158 GWh during the 2019–20 water year, a reduction of 18.2% relative to the 2016–17 five-year peak. A similar trend can be seen in the water year data through June. Comparing June water year YTD data over the last six water years, shows that western hydro generation through June for the 2020–21 water year (112,256 GWh) is 28.3% lower than the comparable time frame for the 2016–17 water year (156,598 GWh).

The generation sources used to replace the reduced hydro generation in 2021 has varied within the West Census Region. In the Pacific Census Division, hydro generation is down 14.8% (10,381 GWh) when comparing the June 2021 calendar year YTD (59,951 GWh) versus June 2020 YTD (70,332 GWh). This lost hydro generation has largely been made up for by increased generation from natural gas (up 5,923 GWh, or 11.9%), solar (up 2,889 GWh, or 18.2%) and wind (up 1,098 GWh or 6.8%). In the Mountain Census Division, hydro generation is down 7.8%, or 1,429 GWh, when looking at June 2021 YTD generation (17,293 GWh) relative to June 2020 YTD (18,722 GWh). Reduced hydro generation, as well as increases in total demand, have been offset by expanded generation from coal (up 5,207 GWh or 10.4%), wind (up 4,218 GWh or 25.9%), and solar (1,455 GWh or 16.3%).

Source: U.S. Energy Information Administration, Form EIA-923, Power Plant Operations Report.
Note: Data for 2020 and 2021 are preliminary; all other data are final.

After June, low water levels in the West might further reduce hydro generation through reduced hydro capacity. For example, the Edward Hyatt hydro plant at Lake Oroville, California, announced in early August that it had to shut down due to low water levels. The plant is a 406 MW plant that in 2020 generated in excess of 1.1 million megawatthours (MWh). In June 2021, its net generation was only 11,664 MWh. Reductions in hydro capacity in the West could push wholesale prices higher, particularly during times of high demand. For example, in the region overseen by the California Independent System Operator (CAISO) balancing authority, daily, on-peak prices exceeded $100/MWh on five different calendar days in July.