Eagle Mountain developer agrees to pay Riverside County $77M for pumped power storage project

The would-be developer of the long-stalled, controversial Eagle Mountain pumped power storage project has agreed to pay Riverside County $77 million in community benefits if the project is built, per an agreement approved by the county board of supervisors on May 6.

It is not clear what community would benefit or how, although the need for firefighting protection is mentioned in the memorandum of understanding. The agenda related to the agreement states that “future Board action will be required on expenditures of these funds.”

The Eagle Mountain Pumped Storage Project, to be funded by a NextEra subsidiary called Eagle Crest Energy, has plans for a 1,300-megawatt pumped storage hydroelectric facility at the shuttered Eagle Mountain Mine near the southeastern edge of Joshua Tree National Park. The project would use reservoirs created from two old mining pits to pump water from the lower reservoir to the upper reservoir during periods of low energy demand, and discharge water to the lower reservoir to generate electricity during periods of high demand.

Critics have long charged the project would drain an aquifer under the nearby national park, and harm wildlife and plants that rely on its waters. Project proponents have denied that.

The proposal was approved by the Federal Energy Regulatory Commission in 2014 and the U.S. Bureau of Land Management separately issued environmental approvals for a pipeline and other big pieces of the project in 2017. NextEra is seeking an amendment and extension to the FERC approval to allow it to start construction by 2028.

The new, $77 million community benefits plan would "deliver direct contributions to the county, with $7.5 million at the start of construction, $5 million when completed and annual payments over 60 years of operation," according to a county press release.

“This is a milestone project for the Fourth District and for Riverside County,” said Supervisor V. Manuel Perez, who represents the Coachella Valley and county lands east of it to the Arizona border, including the Eagle Mountain site. “This project repurposes long-disturbed lands previously used for iron ore mining and turns it into a hydroelectric project, storing and producing new clean energy. This is a historic investment in our communities. The financial commitment by Eagle Crest Energy on this privately funded project will yield tremendous benefits to the community for decades to come.”

But Neal Desai, Pacific Region director for the National Parks Conservation Association, which is engaged in lengthy litigation in federal court to overturn BLM's project approvals, sees it differently.

"Calling reimbursements to local government for expenses created by the project a 'community benefit' seems disingenuous," he said of the $77 million agreement.

He also questioned the durability of the pledge.

"The agreement also looks like it can be easily terminated by any party, as the dispute resolution provision commits to only a few of weeks of meetings to try and resolve any issues."

Riverside County ceded its rights to formally approve or deny any of the project plans on private lands, although the company pledged to try to follow county planning policies as much as possible. Much of the project is on federal lands. Getting anything built on the site, once a Kaiser Steel iron ore mining operation, has proved torturous.

A proposal to use the pits and adjoining lands as a massive landfill for garbage produced by Los Angeles and others was defeated after vocal public opposition. NextEra, a deep-pocketed renewables company based in Florida, partnered with Eagle Crest project developer Steve Lowe in 2016, and has in recent years successfully built several commercial solar projects along the Interstate 10 in eastern Riverside County, not far from the pumped energy storage site.

But it has been thwarted half a dozen times in efforts to win major state subsidies for the project by a broad coalition of more than 40 opponents, ranging from farming trade groups to environmentalists. Two state laws were enacted in 2023 that exclude Eagle Crest and other new, large pumped storage projects from qualifying for state environmental streamlining and from being financed under a state energy procurement authority.

Still, the press release touting the agreement says the Eagle Mountain Pumped Storage is projected to provide over $1.9 billion in new property tax revenue to the county over 60 years, and would make the project one of Riverside County’s largest property taxpayers. It also says the facility "is expected to create $2.3 billion in savings to California power customers over the first 30 years of operation."

It does not spell out how those savings would be achieved. During construction, the project is expected to create 4,500 jobs and yield $340 million in related economic production for Riverside County. Once operational, annual economic production stemming from the facility could reach $27 million, the release said.

“We are excited to be celebrating this milestone and to be a part of the Riverside County community now and into the future,” said Kerry Hattevik, vice president of policy development at NextEra Energy, in the news release. “As we continue to bring Eagle Mountain Pumped Storage closer to construction, the project is delivering on the promise of lowering carbon emissions and driving down the cost of energy. This long-term cooperative agreement is exactly how we strive to support our neighbors and the communities we work within.”

But Desai said the promised savings and benefits are illusory, and that the project technology is outdated, costly, and not in step with state plans for renewables. He said the project wants to generate 1300 megawatts, while the California Energy Commission said last fall it only needs 800 megawatts of such power and is considering 16 different proposals for it statewide.

Many environmental groups think the site should be added back to Joshua Tree National Park, from which it was carved out in the mid-20th century, but deals to do so have fallen through.

"Eagle Crest is out of step with California’s energy needs, which also explains why the company has yet to find a buyer for the project (electricity) and why it has repeatedly sought and failed to pass state legislation to force ratepayers to cover financing," he said in an email.

Janet Wilson is senior environment reporter for The Desert Sun and co-authors USA Today Climate Point. She can be reached at jwilson@gannett.com.