[wbill]

See a couple of the previous posts....

You're right...they're missing a step. Roughly, the plant generates power during peak (read: expensive) periods and pumps the water back during off-peak (read: cheap) periods. Energy is *not* conserved, just money. :-)

Hydro plants do this all the time - generate during the day and pump at night.

[capt. norm]

Now it makes sense. I knew there had to be a major step missing.

They use the pool at the top almost like a giant storage battery for potential energy and then use it during peak loads.