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The Dalles Dam water forecast continues to fall, driving power forwards to record highs

Highlights

The Dalles water-supply forecast at 84% of normal

The Dalles inflows 38.6% below three-year average

Mid-C August 336.5% higher than 2020 package

The Dalles Dam water supply forecast is sitting 22 points below year-ago levels with the weather outlook indicating prolonged below-normal precipitation and above-normal temperatures, raising concerns over summer supply conditions and driving power forwards to record levels.

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Although March had cooler temperatures, April and May temperatures were above normal, combined with below-normal precipitation with the major of the region below 50% of normal, hydrologist Henry Pai said June 3 during the monthly Northwest River Forecast Center water supply briefing. Year-to-date precipitation levels are trending below normal across the Pacific Northwest.

"It's been a dry past three months," Pai said.

Snowpack and seasonal precipitation in the Upper Columbia is at 80% of normal, with the Snake River at 63% of normal and Columbia River above The Dalles at 71% of normal, Pai said, adding much of the region's snowpack has melted, especially in the south.

As snow melts, it feeds into reservoirs along major rivers in the region where hydropower is generated.

The Dalles forecast below normal levels

The Dalles water supply forecast is at 84% of normal for the April-September forecast period, down 2 percentage points month on month and 22 points below year-ago levels, according to NWRFC data. The Dalles serves as the barometer for hydro conditions in the region. Less hydro generation in the Pacific Northwest roughly translates to less generation available for exports to neighboring regions.

Likewise, Grand Coulee's water supply forecast is at 89% of normal, while Lower Granite is at 70%.

The three-month outlook continues to indicate a greater probability for above-normal temperatures and below-normal precipitation.

"That is not helping out water supply outlook," Pai said.

Inflows into The Dalles averaged 202.05 kcfs in May, up 50% from April, but a drop of 30.8% from a year ago, according to US Army Corps of Engineers data.

Generation produced at The Dalles averaged 701 MW May 1-26, up 24.5% from April, but down 29.5% year on year, according to US Army Corps of Engineers data.

Hydro-powered generation is the lead fuel source in the region, averaging more than 70% of the total fuel mix annually for the last five years and reaching as high as 98% in May 2019 during a strong water year, according to Bonneville Power Administration data.

Excess power from the Pacific Northwest is exported to neighboring regions, such as California.

Power forward prices up

The below-normal water supply outlook translates to less hydro generation availability during the summer peak demand season, which is driving up power forwards.

Mid-C on-peak June reached a record high of $63.25/MWh May 21 and rolled off the curve at $44.95/MWh, 228% above where the 2020 package ended last year, according to S&P Global Platts data. On-peak July reached a record of $145/MWh May 18 and is currently in the mid-$130s/MWh, 330.4% higher than its 2020 counterpart a year ago and up $45 from late May.

The August package reached a record of $170/MWh June 2, which is 336.5% above where the 2020 package was a year ago and up $30 from a week ago.

Spot prices are also trending higher with Mid-C on-peak day-ahead averaging in the upper $70s/MWh so far in June, 539% higher than the same period a year ago, according to S&P Global Plats pricing data.