The huge winter storms in California and out West produced a significant snowpack across the region and increased lake levels, setting the stage for major hydropower generation this year.
Yet analysts say the boom in hydroelectricity could further depress power prices, which might be good news for rate payers but bad news ultimately for independent power producers, or IPPs.
"The more hydro generation you have the less [natural] gas generation you should have," Citi analyst Anthony Yuen told CNBC in an interview.
He expects hydro generation on the West Coast to be stronger year-over-year due to this year's abundant mountain snowpack. Although California hydro generation is unlikely to match the Pacific Northwest, he said it "should still be much better than prior years due to stronger precipitation there."
Late February snowfall levels and water content in the Pacific Northwest "are running at or slightly above average," according to Tony Usibelli, special assistant to the director of energy and climate policy at the Washington State Department of Commerce.
California's Sierra Nevada mountain snowpack stood at 188 percent of normal statewide as of Wednesday, according to the state Department of Water Resources data website.
"We do expect more in-state hydroelectricity to be available in summer 2017 than last year," said Steven Greenlee, a spokesman for the California Independent System Operator, which operates the high-voltage grid for most of California. "In-state hydropower production was significantly less during the most recent drought years."
California also imports hydropower electricity from the U.S. Pacific Northwest region. Washington State, both the largest producer and consumer of electricity generated from hydroelectric dams, doesn't consume all of the hydropower produced so the output is sold to utilities throughout the region.
Swami Venkataraman, a Moody's senior vice president and analyst covering utilities and power, said competition from more renewable power over the last four to five years — wind and solar in particular — has resulted in power prices that "have been very depressed. So this is [comeback in hydro is] going to worsen that problem."
In particular, the Moody's analyst said the increased hydropower generation is "definitely a negative" for IPP companies such as Houston-based Calpine, which has exposure to California gas-fired plants.
"Increasing renewables penetration and more recently and temporarily increased levels of hydro generation have severely weakened the energy market," Trey Griggs, president of Calpine Retail, said during the company's fourth-quarter earnings call earlier this month. "However, we're starting to see signs of improvement in the outlook for resource adequacy markets, reflecting the increasing value of well located, reliable, dispatchable assets like ours."
CNBC reached out to Calpine for further comment about hydro impacts.
At the same time, some see the improved hydro outlook as particularly positive for Northern California public power utilities such as Silicon Valley Power, Sacramento Municipal Utility District as well as other public utilities with hydro-generation assets.
"Utilities will definitely benefit from the lower cost of power," said Matthew Reilly, an analyst at Fitch Ratings who covers the public power utilities. "A lot of them had to purchase power on the market [in drought years] to replace shortfalls in hydro."
PG&E, the large investor-owned utility based in San Francisco, also could benefit from a resurgence in hydropower.
In a normal rain year, PG&E can get about 15 percent of its total power needs from hydro, according to spokesman Paul Moreno. But in a low-hydro environment such as drought years he said it was sometimes half that amount.
California's hydro production usually increases during the spring snow melt but production historically peaks during summer months when there's generally more power demand.