Federal regulators dismissed the permit application for the 500 MW Lake Elsinore pumped storage project in Riverside County in response to unresolved conflicts between the water district and project developer Nevada Hydro July 12. The move came after several permitting problems with California agencies. Two days later, the Elsinore Valley Municipal Water District voted to end its agreement with co-developer Nevada Hydro for the estimated $1 billion project. “Nevada Hydro changed the name of the game two-thirds of the way through,” said Greg Morrison, Elsinore water district spokesperson. Nevada Hydro did not respond to requests for comment. The project is known as Lake Elsinore Advanced Pumped Storage, or LEAPS. The two partners had a major falling out over the scope of the permit and whether it should include both the transmission and generation components. In addition, there were a series of permit rejections by federal and state regulators. Morrison said the project is still alive. “The district board is continuing to look at its legal options at FERC.” Last week, the Federal Energy Regulatory Commission tossed out the petition request on grounds it lacked jurisdiction because the permit before it was for a generation only project--the pumped hydro facility--and the co-applicants have been at loggerheads for the last few years. Nevada Hydro wanted to develop the LEAPS transmission line to transport electric power between the systems of major California utilities, FERC concluded in its July 12 dismissal. “Elsinore Valley, on the other hand, wants to develop a pumped storage project as proposed and improve the water quality of Lake Elsinore through the operation.” FERC spokesperson Celeste Miller would only note that the district has 30 days to request a hearing on the permit ruling. The water district and Nevada Hydro signed a deal in 1997. In 2004, they jointly requested a permit from FERC for the LEAPS pumped storage facility and associated 32-mile 500 kV transmission line that would have run through the Cleveland Forest. Later, Nevada Hydro requested that FERC only permit the generation part of the project entailing pumping water out of Lake Elsinore to a higher elevation reservoir and releasing it to create hydropower during times of peak demand. Over the water district’s objection, Nevada Hydro also separately sought approval from California Public Utilities Commission to build the associated 1,500 MW transmission that would have carried more than the power from the pumped storage to improve the project economics. The project faced other roadblocks as well including: -In 2008, FERC concluded that the project could not be managed by the California Independent System Operator, nor would it allow the transmission part of the project, estimated at $350 million, to qualify for rate recovery. The developers attempt at full rate recovery was earlier rebuffed by the CAISO (Current, Aug. 17, 2007). -In April 2009, the CPUC rejected Nevada Hydro’s transmission permit application after deeming it incomplete. -The CAISO also dismissed the project in May 2007 when the developer tried to get it classified as a transmission system so it could receive a portion of transaction fees. The grid operator decided it was a generation project instead. -In October 2009, Nevada Hydro sought a water certification permit from the State Water Resources Control Board. The board denied the request because of the lack of “adequate documentation to comply with the [California Environmental Quality Act]” according to the agency. Nevada Hydro then asked for reconsideration. -In March of this year, the Water Board declined to reconsider the water certification permit application.
