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Eagle Crest on Move in Mojave

Santa Monica-based Eagle Crest Energy cleared a key hurdle this month in its attempt to build a massive hydropower storage facility in the Mojave Desert when it secured a crucial federal agency approval for transmission lines across public land.

Now the company faces new hurdles: Eagle Crest needs to renew its expired license from another federal agency and is seeking legislation in Congress to make that possible. And the project near Joshua Tree National Park faces the threat of appeals and lawsuits from national park advocates concerned about potential depletion of an aquifer that feeds wildlife within the park.

At stake is Eagle Crest’s $2.5 billion plan to turn an abandoned iron ore mine into a storage facility that would help manage electricity generated from nearby wind and solar projects.

Kaiser Steel operated the mine from 1948 through 1982; after it shut down, the site was used for filming, including scenes from “Terminator 2: Judgment Day.” A massive dump was proposed for the site in the early 1990s, but those plans fell through as the demand for additional dump space waned.

Eagle Crest purchased the site from Kaiser Ventures, the successor company to Kaiser Steel, in 2015.

Other plans terminated

Eagle Crest’s plan would turn two huge mine pits into water reservoirs. At times when excess energy from solar and wind farms is available, it would be used to pump water from the lower reservoir to the upper one; when solar and wind generation falls off and demand for power remains high, the water would flow in the other direction, powering hydroelectric turbines and sending electricity to the power grid.

A maximum of 1,300 megawatts of electricity could be returned to the grid, enough to power nearly 900,000 homes and about 60 percent of what the San Onofre nuclear power plant generated at full capacity before it was shut down six years ago.

NextEra Energy of Juno, Fla. – one of the nation’s largest renewable power developers – joined the project as a development partner in early 2017. NextEra, which also is the parent of Florida Power and Light, posted $17.2 billion in revenue in 2017.

Backers of the project say it’s essential as the state increasingly turns to alternative power sources – chiefly solar and wind – to meet greenhouse gas reduction mandates. Wind and solar are intermittent power sources, however, and state officials and electric utility executives have been scrambling to find ways to store energy from those sources as a reserve to put on the grid when needed most.

“This project will eliminate millions of tons of greenhouse gas emissions and assist California in achieving its renewable energy goals,” Eagle Crest Energy President Steve Lowe said in a statement following the federal agency approval.

Aquifer threat?

Opponents say that high water evaporation rates in the desert mean the two proposed reservoirs inside the abandoned mine would have to be replenished constantly with water from an aquifer that stretches into adjacent Joshua Tree National Park, which surrounds the mine site on three sides. A drain on that aquifer, they contend, would threaten plant and animal life within the park.

“They are creating what essentially is a dam in one of the hottest places in the world,” said David Lamfrom, California desert director for the National Parks Conservation Association, which is leading the opposition to the project. “The evaporation levels this project would entail make for a very poor use of this most valuable (water) resource.”

Lamfrom noted that covering the reservoirs would reduce the evaporation rate, but said that the plans submitted by Eagle Crest did not contain any covers.

Eagle Crest’s Lowe did not respond to inquiries on reservoir covers or other additional questions.

Lamfrom said his association plans to appeal the Aug. 1 decision from the federal Bureau of Land Management granting permission to Eagle Crest to string transmission lines from the project across public land to a Southern California Edison substation 16 miles away and run water pipelines through the area.

The decision by Jerome Perez, the BLM’s state director, cited a finding in an assessment the agency conducted that the project would not have a “significant impact to the quality of the human environment” in the area.

The BLM approval was welcomed by Eagle Crest, which issued a statement saying it marks a milestone in its effort to expand the state’s renewable energy market, protect power grid reliability and create hundreds of jobs through the construction process.

Lamfrom, meanwhile, said that his group will appeal the decision later this month to a panel within the U.S. Department of the Interior, which oversees the BLM. He said the group will consider taking legal action to block the project if the federal panel doesn’t reverse the approval.

Expired license

Eagle Crest Energy also is seeking to extend a deadline related to its license to operate a power facility that it won from the Federal Energy Regulatory Commission in 2014. The license has expired, since it contained a deadline of June 30 of this year for construction to begin on the project, which was not met.

Eagle Crest has turned to Congress for help in extending the deadline.

U.S. Rep. Paul Cook, R-Apple Valley, introduced legislation weeks before the deadline – when it was apparent construction wouldn’t start on time – that would reinstate the FERC license and give Eagle Crest another six years to start construction. But that legislation has not yet moved out of the House Energy and Commerce Committee.

“This is an environmentally friendly solution that will also benefit the local economy, providing approximately 763 jobs during construction and generating more than $100 million in annual income for California residents,” Cook said in the Eagle Crest statement following the BLM approval.

No utility commitments

Lamfrom pointed out that Eagle Crest has yet to persuade any of the state’s power utilities to make public commitments to store power at the project once it’s complete.

Eagle Crest’s Lowe declined to answer questions about utility commitments. But in a statement for a Business Journal article three years ago, he said the company was working with electric utilities, the state’s grid operator – a quasi-public entity called California Independent System Operator, or Cal-ISO – and the California Public Utilities Commission to bring the project online “as early as 2022.”

The effort to sign up utilities could receive some help from some recently introduced legislation in Sacramento. AB 2787, by Assemblyman Bill Quirk, D-Hayward, would require the state’s grid operator to develop a policy to procure power from “pumped storage” hydropower projects, such as the one proposed for Eagle Mountain.

“In order to meet its climate goals, California cannot solely rely on battery storage,” Quirk said in an emailed statement. “It needs the technology pumped storage offers, the ability to capture store large amounts of excess electricity for use during peak demand.”

The bill has been referred to the Senate Rules Committee; to pass this session, it must move to the Senate floor for a vote within the next week.

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.
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