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Data: National Integrated Drought Information System; Map: Andrew Witherspoon/Axios

Drought is tightening its grip on the West, and that could spell fresh trouble for the region’s power grids.

Driving the news: Data released Thursday shows “exceptional drought,” the worst category, now extends across Napa, Sonoma and parts of the East Bay region. All of California is in at least "moderate" drought after an unusually dry winter, despite having entered the wet season without severe short-term drought outside of the northern reaches of the state.

Why it matters: With fresh memories of last summer’s record-shattering wildfire season, heat waves and power outages, officials in several states are trying to find ways to withstand the extreme events that are about to test the power grid anew.

Details: One initiative that just launched in California is on the energy demand side. OhmConnect, a seven-year-old company that focuses on improving residential energy efficiency, is embarking on a four-city competition to cut as much energy demand as possible by connecting homes to its smart thermostats at no charge.

  • The mayors of Oakland, Bakersfield, San Jose and Fresno are participating in the contest, which involves providing 25,000 free smart thermostats to each city and awarding educational scholarships to whichever one gets the most new signups.

Context: OhmConnect, which partners with Google Nest, is a proven player in the energy demand management space.

"Really what OhmConnect has done is figure out how to get residential customers to act, essentially, in concert like a symphony, all at once,” the company's CEO Cisco DeVries tells Axios. "To reduce energy demand in really predictable, reliable ways, and so reliably that it allows grid managers to dispatch us, to dispatch connections to our customers, instead of turning on a power plant."

  • OhmConnect pays its users for the power they save. The company is then paid by the state to save electricity, similarly to how utility companies are paid for generating it.
  • The company hopes the four-city challenge will add up to reducing 100 megawatts of power demand, in addition to what it's already rated to do in California, DeVries says. That could eliminate the need for one or two so-called "peaker" power plants that are typically only turned on at times of peak demand.

What they’re saying: Oakland Mayor Libby Schaaf, whose city is home to OhmConnect’s headquarters, hopes the initiative will prevent pollution from the peaker plants — that is, natural gas-fired power dispatched during periods of high demand.

  • “Not only are we, you know, forestalling climate change, but we are stopping the unjust pollution that disproportionately harms low-income communities of color, that comes from those dirty plants," she said of the effort.
  • "So this is not just something that will hopefully prevent blackouts, but it's something that allows us to advance an equitable climate change agenda,” she said.
  • She added that Oakland is going to win this contest. “You know, we're very competitive here in Oakland. We're used to being champions.”

The big picture: It’s not just California that’s mired in drought and facing an imminent severe wildfire season, with heat waves and an unusually strained grid. Every Western state is affected, with exceptional drought now extending its tentacles into the Colorado River Basin.

  • As detailed in Canary Media, there are indications that states that California might seek to import power from will have their own challenges, especially as hydropower resources come under strain as water levels drop in reservoirs.
  • For example, Lake Mead in Nevada is on the verge of seeing its lowest level on record, triggering a water shortage declaration and water allocation reductions to some of the seven states that share the Colorado River's water.
  • The current drought is occurring within a longer-lasting "megadrought," which scientists found is the second-worst in at least 1,200 years.

Go deeper: Drought stokes fears of severe fire season in West

Go deeper

California's worsening wildfires spark fresh evacuation orders

A view of the Caldor Fire in El Dorado County, California, about 1pm PT on Tuesday. Photo: U.S. Forest Service

Red flag warnings are in effect over a vast stretch of the West — including California, Nevada and Montana, prompted by strong winds, high temperatures and drought conditions.

The latest: In Northern California, where fuel moisture and flammability are especially conducive to extreme wildfire behavior, the rapidly growing Caldor Fire prompted mandatory evacuation orders to be issued late Tuesday, as it tore through homes in and around the El Dorado County town of Grizzly Flats.

Sarah Palin tests positive for COVID, delaying defamation trial

Sarah Palin. Photo: Matthew Staver/Bloomberg via Getty Images

Former Alaska Gov. Sarah Palin (R) tested positive for COVID-19 on Monday, delaying the start of her defamation trial against the New York Times.

Why it matters: The trial will be closely watched, as it's a rare instance of a major media company defending its editorial practices before an American jury.

S&P 500 slides into correction territory

Data: FactSet; Chart: Axios Visuals

Stocks suffered their worst drop of the year, pushing the S&P 500 on track to fall into a "correction."

Driving the news: The benchmark S&P 500 dropped for its fifth straight day, with losses nearing 3% in early trading.