California’s drought is now in its fourth year, and state leaders are faced with making unprecedented decisions further restricting water use. The brown lawns and dying trees are all too obvious and painful examples of the drought’s impact. However, somewhat lost in the public discussion, but of critical importance, is the impact of the drought on the energy sector, including power use, transmission and supply, in addition to several other secondary impacts such as diminished air quality and increased commodity prices.
The full impact of this four-year drought is still unknown and will remain so until further studies can be conducted. However, certain interim effects are inevitable in drought years and should be recognized and discussed as state agencies look to address the drought’s implications.
Decrease in Hydroelectric Power
California and much of the West rely on hydroelectric power as an inexpensive and usually plentiful supply of on-demand clean energy. However, this energy supply is contingent on a strong snow pack, the traditional source of hydroelectric power. No rain has meant no snow and no spring run-off for reservoir inventory. The current snow pack is at a 500-year low. When such power is absent for any reason — be it drought or environmental restrictions — utilities have historically turned to natural gas or even coal-fired generation to make up for the shortfall. These alternative power supplies come at greater economic and environmental costs for the state.
Air Quality Degradation and Safety Risks
In addition, the dry climate and lack of rain have resulted in numerous catastrophic wildfires in the state. These fires seriously threaten transmission and other power assets, but also add significant new and unanticipated pollution into the air. This air pollution is cumulative to the increased greenhouse gas (GHG) emissions that result from California’s reliance on fossil-fuel resources to replace the diminished supply from hydroelectric resources.
Increased Reliance on Groundwater Pumping
A major use of power in California is for the movement of water through agricultural water projects and the use of pumps for irrigation of crops. Agricultural energy use shifts as more farmers are forced to pump their own groundwater since surface supplies are increasingly limited. Electricity consumption for groundwater pumping is significant, and the drought continues to increase the total amount of groundwater pumped and the depth from which the water is withdrawn, thereby increasing total electricity demand. So while the source of emissions may shift with changes in farming practice, total emissions may nonetheless increase and may also cause increased food prices due to higher cost of production and potential scarcity.
Increased Use of Recycled Water
In response to worsening drought conditions, Governor Brown issued Executive Order B-29-15 requiring a 25 percent reduction in potable urban water use below 2013 levels through February 2016. Significant water conservation and recycling programs have been implemented in response. Thus, as potable water becomes more scarce and expensive, many are turning to recycled water and other new technology solutions to increase water supply.
Recycled water is increasingly used in public green spaces (medians, parks and golf courses) and power plants, but it often requires additional levels of treatment with increased energy use and power plant emissions. Desalination plants may also help increase potable water quantities. However, such plants will also consume substantial amounts of power — again increasing the cost of power and total emissions. The required environmental review process for such projects can often take years to complete so these plants are a long-term solution that may take years to put in place.
Water Scarcity Impact on Distributed Generation Output
Increased solar and renewable power generation is also planned to help meet the new 50 percent renewal portfolio standard (RPS) and increasingly aggressive targets for emissions reductions. This legislation may reduce emissions through use of solar power and other so-called “preferred resources.” But such sources also require water — at a minimum to clean the solar panels to maximize output. Any source of water can be used for such efforts, but a homeowner with installed solar panels (encouraged by regulation, grants and tax benefits) must use what water is available, most often from his local water company. When faced with cutbacks (e.g., a limit of eight minutes twice a week for garden use), cleaning solar panels is not a top water-use priority.
The impact of these events and options will likely result in higher power costs generally, and added GHG and other air emissions, and may even diminish expected local distributed generation supplies. These added GHG emissions also add costs to the utility or generator (and thence to the consumer) for cap-and-trade allowances imposed by California Air Resources Board (CARB) regulations. Under this program, such allowances are both declining in availability and increasing in cost.
Joint Agency Action to Address Drought Implications
State agencies that deal with such issues are not just sitting idly by. The California Energy Commission (CEC) with the California Public Utilities Commission (CPUC) and CARB have collectively and individually begun to address these issues.
For example, on August 28, 2015, the CEC convened state agencies for a workshop to address California’s Drought Response. The workshop was held in conjunction with a rulemaking at the CPUC called the Water-Energy Nexus Proceeding. CEC workshop participants discussed current drought effects and provided updates on state actions to address them, including state rebate programs to install more efficient appliances and water management technologies. The workshop concluded with a long-term outlook: Preparing for a Future of Drought.
One would hope that these initial efforts reflect a permanent shift in managing the state’s increasingly scarce water resources and understanding the drought’s implications for other state resources. But we must realistically assume that the impact of such processes will, even if productive, lag in impact from this year or even next. As 2016 is expected to be an El Niño year, California and the West may have some respite from these woes — but the problems being faced now are cyclical, so we can only hope that the efforts to address potential drought conditions do not disappear with the first rains of the winter.
David Huard is co-chair of the Energy, Environment & Natural Resources practice at law firm Manatt, Phelps & Phillips, practicing in the Los Angeles and San Francisco offices. He is also the partner responsible for the firm’s Climate Change Solutions group and the Solar and Renewables Project Development team. He can be reached at (415) 291-7430 or email@example.com.
This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice. Earlier columns in the fifth edition of this series discussed Hazardous Waste Regulations Impacting Retail Pharmacies, EPA’s Clean Power Plan, EPA’s Voluntary Compliance Auditing Program, Debate over Water Use in Hydraulic Fracturing, Evaluating Climate Change Impacts in NEPA Reviews, California’s Legislative Proposal on Climate Change, The Ban on Crude Oil Exports and California Governor’s Energy and Climate Plan.