Weak hydrology after a poor snow pack, plus higher costs, were among key reasons for a fall in US energy group Idacorp's second quarter operating income while the warm, dry weather saw retail demand rise.

The group said it suffered ‘vastly different’ water conditions compared to the same period last year. Its subsidiary, Idaho Power Corp (IPC), had to use more thermal power resources, purchased power at higher marginal cost.

IPC’s hydro assets only generated 51% of the firm’s output in Q2 compared to almost three-quarters last time.

In a statement, Idacorp CEO LaMont Keen said: ‘Inflows to our largest storage reservoir, Brownless Reservoir, were less than a third of what they were last year during the critical runoff period.’

IPC has revised its estimated hydro generation range for 2007 to 6,000GWh-6,600GWh. The previous estimate was up to 7,000GWh in the year.

The company was also waiting for a decision from the state’s Public Utilities Commission (IPUC) on its application for a rates increase. IWP&DC reported in April that IPC had applied for the rates rise to help offset the economic squeeze caused by the poor snow pack last winter.

The outlook given at the time was for almost half the 30-year average stream flow, as predicted by the US Weather Service’s Northwest River Forecast Center.