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For Immediate Release, April 25, 2008


Jonathan Evans, Center for Biological Diversity, (213) 598-1466
Gene Frick, Sierra Club-Santa Ana Mountains Task Force, (951) 689-2283
Lee Reeder, Inland Empire Waterkeeper, (951) 689-6842

Hydroelectric Dam Doesn't Add Up
Elsinore Valley Water District to Discuss Internal Economic Study

LAKE ELSINORE, Calif.— The Elsinore Valley Municipal Water District will hold a meeting Monday, April 28 to decide whether to release an internal economic analysis that casts serious doubt on the financial viability of a proposed new hydroelectric dam. Although the report was prepared over two years ago it was only recently made public, and has been submitted in the permitting process for a competing energy project called the Sunrise Powerlink.

The report focuses on the costs of the Lake Elsinore Advanced Pumped Storage Project (LEAPS), which proposes a new dam, reservoir, and powerline project in the Santa Ana Mountains of the Cleveland National Forest. The report prepared for the water district and a private company, Nevada Hydro, concludes that “the LEAPS project is unlikely to earn sufficient revenue to cover the costs that Nevada Hydro has identified.”

The proposed new dam would be built adjacent to the San Mateo Canyon Wilderness Area, and power lines would cut across roadless wild lands in the Santa Ana Mountains. “We’ve known for some time that LEAPS is not financially sound and is an environmental disaster,” said Gene Frick of the Sierra Club Santa Ana Mountains Task Force. “EVMWD’s own report confirms this is a financial boondoggle.”

In order to generate power, Elsinore Valley would have to build pumps to first send water to the top of the Santa Ana Mountains to a proposed new reservoir. “High-cost pumping quickly undermines the economics of pumped storage,” the report continued. “This makes it virtually impossible for LEAPS to enter into profitable long-term purchase and sale contracts for energy.”

“In addition to being financially infeasible, LEAPS will have negative environmental effects on the largest natural lake in Southern California and on many streams along the route of the power lines,” said Lee Reeder of Inland Empire Waterkeeper. “Allowing a major transmission corridor to slash through one of the last wild stretches of national forest in the Inland Empire sends the message that we’ve written off the environment here.”

Because of significant environmental impacts, the Lake Elsinore Advanced Pumped Storage Project has been through years of environmental review at the national level and still faces several more years of review and permitting by the California Public Utilities Commission. Elsinore Valley has spent over $3 million of ratepayers' dollars, which may not get repaid if the project is not built.

“The era of dam building is over on our public lands,” said Jonathan Evans of the Center for Biological Diversity. “It’s time to let the public know the true environmental and economic costs of this pipe dream.” 

The following is more information on the financial viability and economic assumptions of the LEAPS Project quoted directly from An Economic Evaluation of the LEAPS Project and Associated Transmission For the Elsinore Valley Municipal Water District, by Samuel A. Van Vactor, Stefan Brown, David Ramberg, Economic Insight, Inc. (Feb 7, 2006).

“When revenue and cost factors are considered, we conclude that the LEAPS project, as a merchant plant, is not viable at this time.”
LEAPS Economic Evaluation, Feb. 7, 2006, page 8
“Thus far, neither the California Independent System Operator (Cal ISO) nor Nevada Hydro has produced economic studies that would support the development of either LEAPS or the transmission system.”
LEAPS Economic Evaluation, Feb. 7, 2006, page 9
“Nevada Hydro’s spreadsheet dated July 20, 2005 assumed an on-peak price of $65 per MWh and an off-peak price of $25 per MWh. Although these price assumptions might be reasonable under different circumstances, since the California energy crisis ended in 2001, such a high differential has existed on only a few days, and the average differential is far lower.”
LEAPS Economic Evaluation, Feb. 7, 2006, page 5
“Based on 2005 actual prices, in our base case we project that LEAPS would have had annual net energy sales of just $0.3 million, instead of the $54.6 million Nevada Hydro calculated.”
LEAPS Economic Evaluation, Feb. 7, 2006, page 6

To download a copy of the report click Economic Evaluation of the LEAPS Project and Associated Transmission For the Elsinore Valley Municipal Water District or visit

The Center for Biological Diversity is a nonprofit conservation organization with more than 40,000 members dedicated to the protection of endangered species and wild places.

The Sierra Club is dedicated to the conservation and preservation of the nation's natural resources.

Inland Empire Waterkeeper is a grassroots non-profit organization dedicated to enhancing and protecting the water quality of the upper Santa Ana River watershed and other waterways of the Inland Empire.

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