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Drought could force switch from hydro to gas-generated power

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POSTED February 4, 2014 9:44 p.m.

SACRAMENTO  (AP) — California’s drought could dry up the state’s supply of hydroelectricity, prompting some utilities to switch to more expensive gas-fired plants, a newspaper reported Tuesday.

“We’re going to miss some of our lowest-cost resources ... at a time when we really need it,” Robert Weisenmiller, chairman of the California Energy Commission, told the Sacramento Bee.

Generation involving water accounts for about 15 percent of California’s total power supply in a normal year.

Gas-fired electricity costs about three times more than hydro power, according to the U.S. Energy Information Administration.

The Sacramento Municipal Utility District, which gets 25 percent of its power from hydroelectric facilities, is using several financial tools to limit the price impact from the drought.

“The good news is that we have prepared for this,” said Jennifer Davidson, the utility’s manager of budget and enterprise performance.

The district maintains a rate-stabilization fund that can be used to buy power during a drought. The money comes from the savings — currently about $27 million — that the utility banks during wetter-than-usual winters.

A fairly minor impact on rates is most likely for the state’s regulated utilities, Andrew Kotch, a spokesman for the Public Utilities Commission, told the newspaper. Any rate increase because of the drought would take effect in 2015, he said.

Utilities are also being careful about running their hydro plants, holding off as much as possible until peak months.

“We are managing our available water resources so this summer we’ll be able to deliver power,” Paul Moreno, spokesman for Pacific Gas and Electric Co., told the Bee.

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