Release Date: May 9, 2023

STEO Between the Lines: Improved water supply conditions in California and Southwest increase regional hydropower outlook

Last year, amid drought conditions, hydropower accounted for about 9% of the electricity generated in California and 5% in the Southwest United States. Precipitation during this past winter has increased snowpack, raised reservoir levels, and almost completely removed drought conditions from these regions, according to the U.S. Department of Agriculture's Drought Monitor.

We expect that these more favorable hydrologic conditions will lead to more hydropower generation this year, with hydropower providing 14% of the electricity generated in California and 6% of the electricity generated in the Southwest, which covers parts of Nevada, Arizona, and New Mexico. Although the Northwest and Rockies has considerably more hydropower generation—the region accounted for more than half of the national total last year—we expect the Northwest and Rockies' hydropower generation to be less in 2023 than it was in 2022.

California's hydropower outlook improved after precipitation this winter

The drought conditions affecting California since spring 2020 improved because of a dozen atmospheric rivers that contributed to increased precipitation between the end of 2022 and spring 2023. This precipitation has helped major reservoirs return to at least historical average levels. In addition, snowpack across the Sierra Nevada through April 1 reached record highs, especially in the Central and Southern Sierra Nevada ranges.

In the May STEO, we forecast 72% more hydropower generation in California in 2023 than in 2022. More hydropower generation in California and continued growth in nonhydro renewables in the region means less electricity generation from natural gas: we expect 9% less natural gas-fired electricity generation in California this year compared with last year.

One source of uncertainty in our forecast is the possibility of warmer spring temperatures, which would melt the Sierra Nevada snowpack earlier than expected. In this case some of the melting snow may bypass power generating turbines for flood control purposes. Less snowpack also means less water available to supply hydropower plants during summer months, when electricity generation has historically been at its highest.

However, the National Oceanic and Atmospheric Administration's Climate Prediction Center currently expects California to experience below 30-year normal (1991–2020) temperatures in May, which would help maintain snowpack for later months. Other water management factors increase uncertainty around our forecast. Beyond hydropower, other water demands such as human consumption, irrigation, and wildlife habitat take precedence.

Southwestern states’ hydropower outlook improves despite low reservoir levels

The Southwest region has been affected by drought for over two decades. Water demand and high temperatures have reduced reservoir levels, particularly at the largest reservoirs in the country: Lake Mead at the Hoover Dam and Lake Powell at the Glen Canyon Dam.

More precipitation in the Colorado River Basin has improved water supply in the region. The Colorado Basin River Forecast Center expects runoff at Lake Powell, which summarizes the hydrological conditions throughout the Upper Colorado River Basin, to be 172% of the average from 1991 through 2020 in April through July.

Given the increased water supply forecast, we expect 12% more hydropower generation in the Southwest in 2023 than in 2022. Overall, though, hydropower’s portion of the region’s generation mix remains relatively similar to last year because of increased electricity generation in the region, especially from natural gas-fired generators.

Uncertainty in our Southwest region hydropower forecast remains because of factors including weather patterns, hydrological conditions, competing demand for water, and conservation efforts. Hotter temperatures in recent years increased evaporation in the region’s reservoirs. Prolonged drought and critically low reservoir levels led the U.S. Bureau of Reclamation (USBR) to adopt conservation measures, which continue to evolve.

The latest measures, which started in May 2022, were specifically focused on maintaining Lake Powell with water levels above the minimum power pool elevation of 3,525 feet. This elevation was deemed a target elevation since it provides a 35-foot buffer above the power pool elevation of 3,490 feet. Below that level, Glen Canyon Dam would no longer be able to generate hydropower. The USBR re-evaluated conditions in April and they now project that Lake Powell will reach an elevation of 3,573 feet by the end of 2023.

Our recently revised forecasting methodology for hydropower in these regions incorporates updated weather conditions and regional hydroelectric operation plans. For California, we use expectations from the USBR’s Central Valley Operations and for the Southwest region, we use expectations from the Lower Colorado Basin Operations.