Western states asked to conserve electricity and water amid ongoing drought

Yahoo Finance's Akiko Fujita and Brian Cheung discuss Californians being asked to conserve electricity amid higher temperatures, Arizona and Nevada facing drastic water cuts due to the effects of a megadrought on the Colorado River, and how climate change is exacerbating these issues.

Video transcript

AKIKO FUJITA: For the first time this year, the government is asking Californians to conserve electricity. This comes as temperatures in the state are supposed to climb past 100 degrees today. The triple digit temperatures come as the Western United States grapples with an ongoing drought.

On Tuesday, the federal government announced the Colorado River will operate in a tier two shortage, starting this upcoming January. The declaration will cut water usage for Arizona and Nevada. Certainly a lot of implications here for the West, especially on the back of climate related emergencies.

BRIAN CHEUNG: Yeah. I imagine that you being a Californian, like, on the ground, I imagine there's a lot of anecdotes about how the state is trying to-- and localities are trying to get the people living in the very high risk areas to try to cut back on their water use so that they can make sure that there's plenty of supply, right?

I mean, I think in some areas, they're asking people to only water their plants a certain amount of times of the day, right? And in the aggregate, you would imagine hopefully that could do something here. But this is a storyline, I feel like, that we come into year after year after year, which underscores the essentially permanence of this type of dynamic in the West.

AKIKO FUJITA: Yeah, I mean, you could argue that the cutting back on water usage certainly not new for those who have been living in California. The electricity part is interesting to me, though, because we're talking specifically about a voluntary electricity conservation. So it's in effect from 4:00 to 9:00 PM today. This is kind of one step before the power outages kick in.

Governor Gavin Newsom out in California, I mean, he has had to play-- it's been a tricky line here because he wants to accelerate this transition to renewables, but he's also put forward legislation to purchase more fossil fuel produced energy because you've got the temperatures rising, more energy usage, and yet you're not 100% relying on renewable yet. He's also talked about sort of extending the life of one specific nuclear power plant out there. So there's a lot of moving pieces on that front.

BRIAN CHEUNG: And as you mentioned, when it comes to that infrastructure right, you can't build that in a day. It's going to take time to build that up, but you wonder if the capacity that they're investing in now is going to be enough to account for any other further changes and maybe higher frequency droughts in the future as well.

So you do kind of wonder, yes, these investments are being put in. Hopefully that allows California to have better preparation for future episodes. But will they always be playing catch up? I mean, what's important to note, too, is that's not just California, right? I mean, you look at what's happening in Europe as well.

You know, Germany with the Rhine River falling to levels that they haven't seen there in a while, right? I mean, there's a drought happening in Europe as well. And they're thinking about all of this as well in what has already been a very traumatic energy crisis from the immediacy of the Russia-Ukraine war. I mean, this is something that's an international story.

AKIKO FUJITA: Well, and there's another wrinkle to add into the mix in terms of electricity because the argument here in California, where there is the widest adoption of EVs, there's one argument that says, well, that's going to strain the grid further, and then others who say, actually, in a power outage, you can drop power from your car to power your house. So EVs kind get into the mix of that discussion, too. But either way, I mean, it really is sort of putting a puzzle together, trying to create that transition, while they still have to deal with triple-digit temperatures and also just the strain on the electricity front.

BRIAN CHEUNG: And just quickly, on the EV point, though, plenty of people, I'm sure, would love to be doing that. They would also love to have the energy power grid to have on their roofs so that they can harness solar.

AKIKO FUJITA: Solar rooftops.

BRIAN CHEUNG: But it's not available. It's not cheaply available. And even if you wanted and had the money and the resources for it, you're on a backlog because everyone's trying to order it, and the supplies and chips certainly aren't there.