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Hydropower Could Grow, Despite Low Gas Prices, PG&E Says

As the largest private-sector hydroelectric power plant owner-operator, San Francisco-based Pacific Gas and Electric Co. (PG&E) has begun a drumbeat for more hydropower.

David Moller, director of the power generation department at PG&E, is advocating full recognition of hydro-based electricity in renewable portfolio standard (RPS) programs, which currently only recognize small (under 30 MW) hydro projects. Anything larger than that can't be counted to meet RPS goals. If PG&E could count all 3,896 MW from its 68 hydroelectric powerhouses, the utility would have exceeded California's current 20% RPS goal and be well on its way to meeting the 33% goal set for 2020.

"If you had a hydro powerhouse on a river somewhere and it was 29 MW and right across the river you had another one that was 31 MW, one qualifies as RPS and one does not, and yet they're equally renewable," Moller said in a recent interview on a PG&E blog, noting that 16% of the utility's power supplies come from hydroelectric sources on its 100-reservoir watershed and hydroelectric system spread across central and northern California.

In other parts of the western United States, where hydropower is most prevalent, state energy officials have expressed concerns that continuing low natural gas prices may erode some of hydro's historic price advantages in the generation queue for dispatching.

"Other things being equal, lower gas prices lower the variable cost of gas-fired resources, and will affect the overall market price of energy and ancillary services," said a PG&E spokesperson working closely with Moller. "The California Independent System Operator [CAISO] considers many factors when determining the optimal mix of supply resources for California."

CAISO is likely to optimize the state's power load with hydroelectric supplies, the spokesperson said. Hydro is considered "operationally flexible with minimal variable cost, including 'free fuel,'" he said.

In this context, falling gas prices may not have a direct, negative impact on the use of hydroelectric resources, at least not in California, the spokesperson said.

Nationally, hydropower accounts for twice as much electricity as the nearest renewable resource-based power, according to Moller, who heads the National Hydropower Association (NHA). The organization is focused on trying to "figure out how hydropower can help even more to be part of the solution to meeting our country's clean energy goals," he said.

Moller stressed three major themes for the hydroelectric power sector: environmental stewardship; maintaining existing hydropower, some of which is more than a century old; and recognizing that hydropower is essential to grid reliability.

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