Financial services firm Morgan Stanley Commodities has agreed to become principal investor in the 500-MW Lake Elsinore pumped-storage and transmission project being developed in California by Nevada Hydro Co.
Nevada Hydro said Aug. 6 that the Lake Elsinore Advanced Pumped-Storage (LEAPS) project awaits final licensing by the Federal Energy Regulatory Commission and final approvals from the state of California in order to begin construction.
Elsinore Valley Municipal Water District and Nevada Hydro applied in 2004 for a license to construct and operate the project (No. 11858). FERC issued a final environmental impact statement Jan. 30 supporting construction of the pumped-storage project and related 32-mile transmission line. (HNN 2/2/07)
Nevada Hydro said the deal with Morgan Stanley creates a new corporate entity, LEAPS Hydro LLC, for the purpose of building, owning, and operating $1.1 billion Lake Elsinore, which Nevada Hydro called the first major hydroelectric project to be constructed in the United States in 20 years.
ï¿½Morgan Stanley’s investment into LEAPS at this time means we are closer than ever to finally being able to begin providing clean and reliable energy to the people of Southern California, ultimately reducing their rates,ï¿½ Nevada Hydro Vice President Rex Wait said. ï¿½We look forward to bringing this valuable asset on line as soon as possible.ï¿½
FERC previously said the project meets the requirements of the Energy Policy Act of 2005 for an advanced transmission technology. Section 1223 of the Energy Policy Act mandates FERC to encourage deployment of energy storage devices, including pumped hydro, as advanced transmission technology. By treating Lake Elsinore as a transmission asset, Nevada Hydro Co. said it believed the project would be easier to finance.
Lake Elsinore is seen as a peak energy resource and as part of a long-term solution to southern California’s transmission congestion bottlenecks. FERC’s EIS noted its 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.
ï¿½The fact that LEAPS and the corresponding transmission line is primarily located in the Cleveland National Forest minimizes the project’s impact on local property owners and provides a unique ability to help address water availability and water quality issues in Lake Elsinore,ï¿½ Wait said.
FERC’s EIS rejected the applicants’ proposal 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. The final EIS supports the plan to locate the powerhouse in Santa Rosa.
Nevada Hydro said Siemens Power Transmission &Distribution Inc. and Voith Siemens Hydro Power Generation will provide innovative technology to the project. Siemens will be responsible for the transmission system, while Voith Siemens supplies pump-turbine generators. Devine Tarbell &Associates has performed preliminary engineering on the project.