2019, LEAPS, Nevada Hydro, Talega-Escondido/Valley-Serrano Transmission line. It's all back

It will surprise some citizens of the Elsinore Valley that LEAPS, the Lake Elsinore Advanced Pumped Storage project, has returned. An application for LEAPS was filed in 2017. I've been watching some developments over 2018. By November 2018, LEAPS had presenters wooing community organizations. Since my first post here in seven years is meant only to establish that LEAPS is back, here's a link to the LEAPS website:

http://leapshydro.com/

At the LEAPS Hydro site,you'll find general information on what LEAPS offers the community. Some highlights are that LEAPS will buy 15,000 acre feet of water to put into Lake Elsinore and continue to add water to account for evaporation to keep the lake surface somewhere between 1240 and 1246 feet above sea level. I think the range at which they maintain the lake level will be determined by the vertical size of their intake/outflow structure, and I'd be more specific about this structure, but the LEAPS proponents haven't provide any specifications on the structure, only to say it minimally disturbs the lake and is under some review with the Lake Elsinore San Jacinto Watershed Authority (LESJWA). -- Also, LEAPS has been wooing LESJWA.

A second development is that the upper reservoir, which will contain approximately 5000-6000 acre feet of the 15,000 mentioned above, is now to be in Decker Canyon instead of Morrell Canyon.

Unchanged from the original plan is that LEAPS includes and depends on 30 miles of new overhead transmission lines through the National Forest.

The business model for LEAPS has changed. In the past, Nevada Hydro proposed to build the plant, transfer it to the California Independent System Operators (CAISO), while they own the transmission line.

The new business model will take some time to study and explain, but in short, is best explained by this passage from a 3/13/2019 letter from Nevada Hydro to CAISO:

Q: What is the projected cost of the LEAPS project and its forecasted annual revenue requirement?
A. Nevada Hydro currently estimates the project’s total cost to be approximately $2 billion...[assuming] a 50-year project life, a 50%/50% debt-to-equity ratio, 5.0% debt rate, 11% nominal return on equity (“ROE”), 29.65 %  state and federal taxes, 1.85% inflation and 0.1% G&A, the resulting levelized real revenue requirement is estimated at $177 million annually.

Get that? Nevada Hydro will operate the plant and transmission lines for the public benefit and require only $177 per million annually from the California rate payer. This is impressively close to the number that FERC estimated LEAPS would lose yearly, after adjusting for 2019 dollars:

Cost table from FERC Final Environmental Impact Statement 2007.
I adjusted the total yearly lose which was estimated in 2005 dollars to 2019 dollars.

And, they could succeed with this business model because a few factors help them argue that the transmission line plus LEAPS acts as infrastructure therefore the public should pay for it and in the 50-year life span it may save money for rate payers in San Diego and Orange counties. It may also assist California in meeting its ambitious greenhouse gas emissions cuts.

I'll elaborate more on what is in the letter for LEAPS Hydro to CAISO, as it answers two of three major unanswered questions I have about the new LEAPS/LINES project. But for now, here are some diagrams I've assembled illustrating the project. Some are mine, and some are from the LEAPS Hydro Facebook page:

This map is from the LEAPS Hydro Facebook page. It shows the current proposal for a Decker Canyon reservoir, buried and surface transmission lines, penstock, power house location and intake/outflow structure.

Here's an overview of LEAPS that leaves out the enthusiastic interpretations (which you can get from LEAPS Hydro):

Diagram summarizing some qualities and impact of LEAPS/LINES project

It can be argued that the net benefits to the San Diego electricity service area outweighs the impacts to local residents, especially as viewed by the beneficiaries. The LEAPS transmission line is an essential part of the project. It will provide the only 500 kilovolt major artery to the northwestern service area of San Diego Gas & Electric. Below is a map showing southern California's electricity service provider areas and transmission lines colored by their capacity. It shows clearly how LEAPS/LINES extends the major power grid into SDG&E territory.  

Add caption

I've also added a closer view of our area.

jg