MenuFeast and Famine: Hydro Notes from East to West
Today, January 16, 2026, is expected to be the first day of commercial operation of the New England Clean Energy Connect transmission project, bringing 1.2 GW of Canadian hydropower from Quebec to Massachusetts. Five years in construction and $1 billion spent, this line is intended to provide Massachusetts with about 20% of its overall electricity, which according to the Massachusetts governor is just wicked awesome. Also in the Northeast, “sometime” in 2026 the Champlain Hudson Power Express transmission project will begin to bring 1.25 GW of Canadian hydropower down to NYC.
The completion and near completion of both projects are case studies of tenacity, grit and spending a lot of dollars, as getting things built in the northeastern US is not easy peasy, lemon squeezy. So maybe this is the wrong time to be asking this question, but… is there enough Quebec hydropower to do all this? In this blog, we discuss this hydro situation in the East but also take a look at what’s unfolding in the western US where hydro supply in the Pacific Northwest (PNW) is currently brimming.
Since 2022, Hydro Quebec (HQ) hydro generation has been steadily declining. Annual variations are to be expected over multi-year periods and drought conditions in recent years have been largely responsible for this, and as a result, HQ has been leaning hard on its neighbors such as NYISO to export beaucoup power to them. (And NYISO has been leaning even harder on PJM for imports). So, where is the 2.45 GW promised to ISONE and NYISO going to come from? Maybe HQ has some secret hydro hidden down in the basement, much as my parents used to do to me on Christmas mornings back in the day. Maybe the snow and rain will return to Quebec, reservoirs will refill, and HQ will expand its hydro capacity as it has advertised.
Figure 1 below shows hydro generation for HQ from 2022 to 2026 YTD, broken out by quarter and shown as green bars in the top pane. The bottom pane, in orange bars, shows imports from NYISO to HQ over that same time period. Positive values are exports from HQ to NYISO, and negative values are exports from NYISO to HQ.
Figure 1| Hydro Quebec Hydroelectric Generation and Imports from NYISO
Across all four quarters, from 2022 to 2026, NYISO has become a net exporter to its neighbor to the north. And so far in the first couple weeks of January 2026, NYISO is averaging about 1 GW of exports to Quebec. It’s a legitimate question to ask that if people are building a couple of very expensive power lines to bring your supposedly abundant hydropower to their doorstep, you should have some abundant hydropower to sell them. The situation in the east for the last couple years, contrasts significantly with the situation playing out in the western US this winter.
On the West Coast we have a very different hydro situation developing this year. The rains and snow have been abundant and in recent articles we have documented this situation including a special report, Weathering the Storm, which highlighted the hydrologic situation and hydropower output occurring in the Pacific Northwest. Most recently, in our article Bumper West Coast Hydro May Have Staying Power, we noted how the abundant PNW hydropower is driving down power and natural gas prices across the region. As shown in Figure 2 below, since the onset of heavy precipitation into PNW since early December 2025, West Coast forward power prices from February to June 2026 have collapsed.
The average for Mid-C RTC forward contracts for February to June 2026, shown as a green line, with November mark dates have fallen from the mid-$40’s to low $20’s in recent days. Similarly, NP15 RTC (red) and SP15 (aqua) have both fallen, while heat rates have lifted slightly in recent days, largely staying contained to a narrow 14-18 range.
Demand for natural gas power burns has dwindled across the West Coast, displaced by hydroelectricity. In California, average thermal generation so far in January 2026 has been 3.4 GW, compared to 7.3 GW in January 2025. The difference has been made up by imports, largely PNW hydro, rising from 4.2 GW in 2025 to 7.2 GW for January 2026, month to date. This demand destruction has led to a perfect storm for price collapse as it piles onto natural gas price declines broadly seen elsewhere across the US in recent weeks. However, the price declines in the PNW and in California are far outpacing the national decline.
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