California’s drought could dry up the state’s supply of hydroelectricity, prompting utilities to switch to more expensive gas-fired plants.
The Sacramento Bee reported that while utilities don’t anticipate shortages when summer’s peak electricity demand arrives, customers could eventually end up paying more.
That’s because gas-fired electricity costs about three times more than hydro power, according to federal energy officials.
Andrew Kotch, a spokesman for the Public Utilities Commission, tells the newspaper “a fairly minor impact” on rates is most likely for the state’s rate-regulated utilities. He says any rate increase because of the drought would take effect in 2015.
Water accounts for about 15 percent of California’s total power supply in a normal year.
Sacramento Municipal Utility District says it has a rate-stabilization fund that can be used to buy power during a drought to keep prices down.
Topics California
Was this article valuable?
Here are more articles you may enjoy.
Trump to Issue Order Creating National AI Rule
How ‘Super Roofs’ Reward Insurers, Cat Bond Investors and Homeowners
Baldwin Group to Buy CAC Group for About $1B in Cash and Stock
Litigation Finance Hits a Wall After Bets on Huge Gains Falter 

