North America, Regulation and Policy

FERC EIS backs 500-MW Lake Elsinore, transmission in California

The Federal Energy Regulatory Commission has issued a final environmental impact statement supporting the construction of the 500-MW Lake Elsinore pumped-storage and transmission project in California.

Acknowledging public concerns about the major development in or near wilderness areas of southern California, FERC staff adopted its own alternative for the Lake Elsinore Advanced Pumped-Storage (LEAPS) project to eliminate some adverse environmental effects. The EIS said the proposal, with staff modifications, represents the best balance between developmental and non-developmental resources in the area.

�Despite the higher cost of the staff alternative compared to no action, it would have the benefit of allowing the co-applicants to construct and operate the project as a peak energy resource and as part of a long-term solution to southern California’s transmission congestion bottlenecks,� the EIS said. �The Talega-Escondido/Valley-Serrano transmission line could provide up to 1,000 MW of import capability into the San Diego area, with up to 500 MW of this imported power being supplied by the LEAPS project during high-demand periods.�

The EIS, released Jan. 30, rejected a proposal of project sponsors Elsinore Valley Municipal Water District and Nevada Hydro Co. to locate the project’s upper reservoir in Morrell Canyon near the San Mateo Wilderness Area in Orange County. Instead, the staff alternative moves the upper reservoir to Decker Canyon in Riverside County.

Staff said using Morrell Canyon would disrupt flows, displace a spring, eliminate forest land, and affect recreation, including hindering operation of two hang gliding launch sites. At the Decker Canyon site, FERC staff said there would be no need to install fish screens because the reservoir would be situated at the top of a watershed.

FERC staff backed off part of its earlier alternative, presented in a draft EIS, that would have relocated the proposed powerhouse from Santa Rosa to Ortega Oaks. The final EIS moves the powerhouse back to Santa Rosa, avoiding conflicts with high-density residential communities at Ortega Oaks and providing a clear path for hang gliding.

Buried transmission line rejected as too costly

FERC staff considered, but rejected as too expensive, an idea to bury the entire 32-mile-long transmission line and a two-mile connection to the powerhouse to eliminate most visual effects.

Otherwise, the final EIS includes most of the co-applicants’ protection, mitigation, and environmental measures.

Elsinore Valley and Nevada Hydro applied in 2004 for a license to construct and operate the project (No. 11858). The final EIS evaluates potential natural resource benefits, environmental effects, and economic costs associated with granting a license. It also evaluates aspects for granting a U.S. Forest Service special use permit for associated transmission lines that would cross Cleveland National Forest. FERC will consider recommendations in the EIS when determining whether to issue a license.

The Forest Service is reviewing an application for a special use permit to build the Talega-Escondido/Valley-Serrano 500-kilovolt transmission interconnection, including transmission lines associated with the pumped-storage project, as a transmission line-only project.

FERC staff sees higher cost of construction

Nevada Hydro has said it anticipates the entire project will cost $1.1 billion to complete, including $750 million for the power project. It estimates transmission will cost $350 million.

However, the EIS estimates the cost of building the project will exceed the project’s economic benefits in the first year of operation. The EIS said the original proposal would cost $120.1 million ($77.03 per MWh) more annually than alternative power and the staff alternative would cost $124.8 million ($80.03/MWh) more annually than alternative power.

�…Our estimated cost to construct the project is higher than the co-applicants’,� the EIS said. �…If the site information the co-applicants gather shows the site conditions are better than what we assumed, they may be able to build the project for less than the cost we estimate.�

FERC previously has said the proposed project meets the requirements of the Energy Policy Act of 2005 for an advanced transmission technology. By treating Lake Elsinore as a transmission asset, Nevada Hydro Co. said it believes the project will be easier to finance. (HNN 1/8/07)