California's record drought has parched crops, but hasn't yet dimmed lights or choked the flow of electricity, even though the Golden State, with more than 300 dams, has long been a hydroelectricity leader among U.S. states.

California's hydro plants generated less power in 2013 than they had in 21 years, but the state's water crisis hasn't turned into an energy crisis, thanks to a mix of renewable energy, natural gas, and planning. (Take related Quiz: What You Don't Know About Energy and Water.)

"From an electricity generation and reliability standpoint, the drought isn't going to have a major impact," said Edward Randolph, director of the energy division of the California Public Utilities Commission. "There [are] ample resources to meet demand."

U.S. Interior Secretary Sally Jewell was set to tour a U.S. Bureau of Reclamation pumping station in Byron on Tuesday, to highlight the federal response to the drought. But when it comes to energy, it's been state policy that has helped bolster California's resilience. California has invested both in new energy sources and in steps to make its system more reliable in response to the energy crisis of 2001 and major heat storms in 2006. Regulations now require utilities to procure, ahead of time, reserve electricity at least 15 percent in excess of their forecasted demand, Randolph said, to ensure they can meet demand even in worst-case scenarios. "California has wild swings in weather from year to year," he said. "There's plenty of resources out there to meet shortfalls caused by extreme weather." (See related, "California Keeps Its Energy Cool in Summer Scorcher.")

"A Deep Hole"

The drought that California is now enduring certainly qualifies as extreme.

Although rain and snow have poured across the state in recent weeks, the storms are not enough to end a three-year drought or to make up for one of the driest years on record. In one striking illustration of the drought's effects, water in Northern California's Folsom Lake reached just 17 percent of the reservoir's capacity and 35 percent of its historic average.

"We're in a deep hole," said Heather Cooley, co-director of the water program at the Pacific Institute, an environmental research group based in Oakland, California. "A couple of storms—even though these have been pretty wet storms—doesn't catch us up to where we need to be."

That reality is reflected in a dramatic decline in production by California's hydroelectric complex. The state has capacity to produce more electricity from hydro than any other U.S. state except Washington and Oregon. But last year, California hydro generation totaled only 23.9 million megawatt-hours, according to the U.S. Energy Information Administration's most recent and detailed state data. California's historic energy data shows that's the lowest level since the drought years of 1991 and 1992. Over the past 30 years, hydro has made up an average of 14 percent of California's electricity mix; in 2013, it contributed just 9 percent.

But the state now has more options to take the place of hydro than it did in previous droughts. Importantly, a wave of wind and solar projects has swept the state. In 2013 alone, California's renewable generating capacity increased by more than 20 percent with the addition of 3.3 gigawatts. "If we look back, I think California is in a slightly better place in that a larger fraction of our energy is from renewables, especially renewables that don't require water—solar photovoltaics and wind," Cooley said. (See related quiz: "What You Don't Know About Electricity.")

View Images The heliostats at the new Ivanpah Solar Electric Generating System in the Mojave Desert, largest solar thermal plant in the world, are emblematic of California’s changing energy landscape. Photograph by Ethan Miller, Getty Images

Wind energy, which provided less than 2 percent of California's electricity consumption on average over the previous decade, ramped up in 2013 to provide 5.2 percent of the state's power. (See related story: "Too Much Wind? Save It in Underground Volcanic Rock Reservoirs.") And solar has surged from contributing an average of 0.3 percent of California electricity use over the past decade to 1.5 percent in 2013. (See related, "As Solar Power Grows, Disputes Flare Over Utility Bills.") Even geothermal energy showed an upswing, thanks to increased capacity; the state's geysers have long helped make California a geothermal leader, but production had been stagnant or falling until recently.

Switching on the Gas

Still, some experts warn that it would be wrong to conclude that renewable energy has been California's only savior, or even its most important one.

The state's new renewable resources "will definitely provide benefit at the times of day when they're there," Randolph said. But because utilities won't be able to turn sunshine and wind off and on when needed, he said, they'll turn to natural gas. Indeed, natural gas provided about 46 percent of electricity consumed in California in 2013, according to EIA's figures, up from an average of 37 percent over the past 10 years. (See related, "New 'Flexible' Power Plants Sway to Keep Up With Renewables.")

For example, the Sacramento Municipal Utility District, or SMUD, which typically sources 28 percent of its electricity from hydro, now expects it to meet only about 16 percent of its electricity needs this year, according to Scott Martin, manager of the utility's resource planning and pricing. The watershed that supplies SMUD's upper American River hydroelectric projects has received only about 60 percent of the precipitation it expects to see in a normal year. To fill the gap, SMUD plans to run its natural gas plants more and purchase more electricity. "It's possible we may receive more renewables as well," said Martin. "But that would be a small impact on the replacement energy." (See "Pictures: Oil Potential and Animal Habitat in the Monterey Shale.")

The reason for natural gas's importance is economic. "When you line up the units every day to figure out what you're going to run, it's typically done by the price," said Tyson Brown, an analyst for EIA. Hydro power is generally a low-cost option. But when hydro production drops, electricity from natural gas—the next cheapest alternative—dials up.

Swapping in natural gas for hydro means higher emissions and higher procurement costs for utilities, which would be reflected in electricity bills next year. During the drought of 2007-09, California utilities burned more natural gas to make up for hydropower shortages—a switch that the Pacific Institute says resulted in 13 million extra tons of CO2 emissions and some $1.7 billion in additional costs on energy bills.

Yet Martin says SMUD does not anticipate a significant financial impact as a result of the drought. The district has weather insurance that pays out when there is low precipitation, he said. It makes deposits to a "savings account" when there is excess hydro, and withdraws from it when there is less hydro than normal. "We are optimistic that between the savings account balance and our insurance, SMUD will be able to cover any additional costs without changing customer rates," Martin said. "However, that depends on the amount of water we get for the rest of the winter and spring and the market price for power."

The forecast, so far, looks grim. According to analysis from the National Weather Service, the state as of March 2 had a one-in-200 chance of hitting average rainfall levels for the 2013-14 year. A map reflecting data from the U.S. Drought Monitor shows red, orange, and yellow smearing across much of the American West—with the driest, angriest, dark-red bullseye centered on the Golden State, 90 percent of which is now suffering severe or extreme drought. More than 22 percent of the state is experiencing what monitors consider exceptional drought.

View Images Workers install solar panels on a home in Oak View, California. Rooftop power has helped the state weather the drought. Photograph by Joseph Sohm, Corbis

In a way, the seasonal rhythm of electricity demand, weather patterns, and water flows have so far worked to California's benefit in avoiding an energy crunch despite diminished hydro resources. According to Brown, when it comes to reliability—keeping the lights on—"the big concern grid operators" is less about meeting average demand than having an adequate buffer available for the peaks. "Luckily, the peak demand in California is in the late summer—August or September," when air-conditioning tends to drive up electricity use. Even during wet years, energy planners don't count on hydro (which declines after spring and early summer) to meet those peaks.

Adapting to Climate Change

California has other advantages in managing its drop in hydropower. For example, it can call on its neighbors for help. "California is in a bit of a unique position because it imports so much of its load from the Southwest as well as the Pacific Northwest," said Brown. When in-state supplies take a dive, the state has the infrastructure to import more electricity.

In addition, improvements to California's power grid made since the droughts of 1987-92 and 2007-09 also put the state in a better position to deal with water shortages, Brown said. Grid operators are now running models hourly—rather than daily, as they did in the past—to plan how to dispatch their resources.

Also, even though California is a big hydropower state, with 14 percent of U.S. hydro capacity within its borders, its energy system is among the least thirsty. That's partly because it relies so little on coal power plants (less than one percent of its electricity). And the state's two nuclear plants (one of which is being decommissioned) rely on nearby seawater for cooling. Most water consumed for electricity goes toward cooling large coal and nuclear thermal power plants; in all, these thermoelectric plants account for nearly half of all water withdrawals in the United States. (See related, "Water Demand for Energy to Double by 2035.")

"In that sense, California is less vulnerable than other parts of the country," Cooley said. Brown concurred: "You're not going to have the reliability issues that you would for a coal plant in Texas in an extended drought."

Watch a video showing California's sparse snow pack this year:

Yet more work remains to bolster California's electricity supply in the face of global climate change and ambitious goals to reduce greenhouse gas emissions. (See related story: "Climate Change Impact on Energy: Five Proposed Safeguards.")

Drought has shaken energy systems around the world in recent years, from Brazil, to France, to China. In Panama, where hydroelectricity contributes more than half of all electricity generation, the government ordered power rationing last year after declaring a drought emergency spanning one-third of the country. (See related story: "California Tackles Climate Change, But Will Others Follow?")

"We know that water availability is impacting energy generation," Cooley said. "Right now, it's only during droughts, but as these become more frequent and more intense, as population grows, these events will occur during even average years."