The always interesting Pacific Northwest promised in the opening days of February to get even more interesting from a hydroelectric energy standpoint with a near-term “dumping” of cheap hydro supplies only to be followed by well-below-normal water runoffs in the spring, all of which adds up to the potential for higher wholesale power prices, exports and natural gas demand in the region, according to Boston-based consultant Energy Security Analysts Inc. (ESAI). The Western Energy Coordinating Council (WECC) flagged the ESAI analysis in its latest “market watch report.”

Exacerbating the potential water shortage situation this spring and summer are the continuing financial struggles of the region’s largest power entity, the federal government’s wholesale electricity marketer/transporter, Bonneville Power Administration (BPA). At the end of last month, BPA gave the Northwest Power Planning Council more sobering statistics on its continuing deficit situation with the advent of higher-than-budgeted costs for BPA’s multi-million-dollar fish and wildlife protection program that is expected to be about $139 million this year.

Reports have indicated that January was good for many reservoirs throughout the WECC region with sufficient rain and snowfall, but the increased storage levels are misleading, according to ESAI’s analyses. That is because the predominant form of moisture has been rain — not snow.

“Snow pack levels that enable spring runoffs and secure summer hydro generation capability remain well below normal in the Northwest — as low as 25% of normal in many areas,” said Debbie Strumsky, an ESAI power/natural gas analyst quoted by the WECC. “This bounty for precipitation has resulted in hydro dumping in recent weeks and boosted amounts of hydro-generated megawatts on the system. However, after the current surplus has been released, the warmth of spring will bring dismal runoffs and hydro generators will head into summer 2003 with limited capability.”

ESAI indicated that its hydro estimates for July and August are “in line with actual output generated in the summer of 2000” — that was when the western power crisis began to show its ugly face in California. At that time the record drought in the Northwest contributed to the regional supply crunch, increased gas demand and skyrocketing wholesale prices.

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