Due to persistent drought in the West over the past two decades, hydroelectric power generation has been limited, costing the industry and the region billions in revenue.

The sector lost about 300 million megawatt hours of electricity generation between 2003 and 2020 due to drought and low water compared to the long-term average, researchers at the University of Alabama found. That equates to a loss of about $28 billion in revenue. Half of the decline in electricity generation was due to the drought in Oregon, Washington and California, which produce half of the hydroelectric power generated in the U.S.

The researchers published their findings on July 23 in the journal Environmental Research Letters.

The three states were the most affected financially and environmentally by the decline in electricity production. Economic losses in California were estimated at over $8.7 billion, and in Washington over $4 billion. In Oregon, the hydroelectric sector is estimated to have lost over $1.5 billion in revenues over these 18 years.

When there isn’t enough hydropower available, utilities are forced to buy energy from fossil fuel producers, mostly natural gas companies, which drives up emissions. Buying gas-fired electricity to supplement the lack of hydropower increased carbon dioxide emissions by 10% over the 18 years, the study found.

To reach their conclusions, the researchers analyzed water flows from hydroelectric dams across the U.S. from 2003 to 2023 and compared them with drought maps for the same period. They found that droughts were more severe and frequent in the western states than in other parts of the U.S., and therefore caused the greatest losses.

Hydroelectric power generation from dams in Oregon and Washington fell to historic lows last year. Both Oregon and Washington generated 20% less hydroelectric power in 2023 than in 2021. The U.S. Energy Information Administration attributed this to low precipitation in the fall and winter, as well as the May 2023 “heat dome” that pushed regional temperatures 30 degrees above average and rapidly melted snowpack in the region that traditionally feeds rivers and streams throughout the summer. Federal agency experts predict that hydroelectric generation across the West will fall 12% in 2024 compared to 2023, leading to more historic lows.