A federal environmental study recommended that a 500 MW pumped-storage project on Lake Elsinore in Riverside County move to another basin - from a reservoir at Morrell Canyon to nearby Decker Canyon. The study's conclusion moved the project moved a step closer to a federal license January 31. The $1.3 billion speculative project not only must be permitted by the Federal Energy Regulatory Commission but also needs a Clean Water Act permit and must pass muster under the California Environmental Quality Act. The proposed facility - known as the Lake Elsinore Advance Pumped Storage Project - would include both a hydro pumped-storage component and a new transmission line that would allow import of an additional 1,000 MW of power into San Diego County. The developers propose to build the transmission line and place it into service before the project's hydro component. The U.S. Forest Service must grant a right-of-way for the proposed transmission line. The final federal environmental impact statement concluded that power generated by the project would be a lot more expensive than electricity from other potential sources, such as gas-fired plants, at as much as $80/MWh. The goal of the joint project developers - the Lake Elsinore Valley Municipal Water District and Nevada Hydro Company - is to obtain the needed permits and then sell the development rights to a local utility, said Greg Morrison, water district spokesperson. He said the developers plan to seek the water permit in conjunction with their state environmental analysis in the coming months. Selling construction rights would allow Nevada Hydro to recover its development costs, plus a profit, said Morrison. FERC cannot issue a license for the project until the developers obtain the water permit, said Celeste Miller, commission spokesperson. The FERC document also recommends placing some of the associated transmission lines underground to avoid disrupting a popular local hang-gliding spot and to eliminate visual impacts from encroaching suburban housing developments. The changes would raise the estimated cost of the project from $1.28 billion to $1.32 billion. No federal action is expected before this summer. - William J. Kelly