Southwest hydropower output heads for 2026 decline as Colorado River drought deepens

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Southwest hydropower decline 2026

Highlights

Southwest hydropower generation from April to August 2026 is projected at 19% below the prior year and 28% below the 10-year average, per EIA data.
EIA forecasts total Southwest hydropower output at 6.13 billion kilowatthours in 2026, down 9% from last year and 24% below the 10-year average.
The Department of the Interior mandates California, Arizona, and Nevada collectively cut water usage by 1.25 million acre-feet annually over the next two years to stabilize Lake Powell and Lake Mead levels.

Low reservoir levels pressure dam generation

As reported by Today in Energy, the latest U.S. Energy Information Administration data from the Form EIA-923 survey show hydropower generation in the Southwest from April through August 2026 is 19% lower than a year earlier and 28% below the 10-year average.

The Southwestern electricity supply region includes Arizona, New Mexico, and small parts of Nevada and California. Water elevations at Lake Powell and Lake Mead also reach record lows, underscoring the pressure on output from the Glen Canyon Dam and Hoover Dam.

Lake Powell needs to stay at or above 3,490 feet to generate hydropower at Glen Canyon Dam. At the end of September, the reservoir stands at 3,518 feet, less than 1% above minimum power pool. Lake Mead must remain at or above 950 feet for Hoover Dam generation, and it reaches 1,038 feet by the end of September, 9% above that threshold.

The U.S. Bureau of Reclamation manages most dams across the Colorado River Basin, where Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming depend on the river for electricity production and other water supply needs.

Water cuts and weaker regional power mix

To reduce the risk of Lake Powell falling below minimum power pool, water is released from Flaming Gorge in the Upper Colorado River Basin. Releases from Lake Powell are also reduced to help keep the reservoir at or above 3,510 feet based on the most probable inflow outlook.

Those lower releases from Lake Powell can in turn weigh on downstream water levels at Lake Mead, creating additional pressure for Hoover Dam generation. In response, the Department of the Interior decides to cut the collective water consumption of California, Arizona, and Nevada by 1.25 million acre-feet a year over the next two years.

The EIA expects Southwest hydropower generation to total 6.13 billion kilowatthours in 2026, down 9% from last year and 24% below the 10-year average. For 2027, output is forecast at 6.1 billion kilowatthours, 0.5% lower than in 2026.

The agency says El Niño this year could bring above-normal precipitation, offering some drought relief and supporting the regional generation outlook. Even so, hydropower is expected to make up only about 4% of the Southwest generation mix in 2026, down from a peak of 8% in 2011.

Earlier, we discussed the natural gas pullback as traders weighed mixed weather forecasts ahead of EIA storage data.

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