Once you reach the entrance to Paradise City, it's blocked by police officers. When you talk to them, they tell you that there's "something wrong" in the power plant that could endanger people, so the whole city's evacuated. Later (When you have 5 badges), the city is unblocked, and a few NPCs will tell you that the power plant workers fixed whatever was wrong. However, when you go to a power plant, you meet a guy named Tony, who tells you that something is suspicious here, and he wants to investigate it.
The power plant is really old. It was created in the year 1850 - humans didn't know a lot about electricity, but they were able to exploit the power from electric Pokemon. But now, there are machines and technology to create electricity, so there's no need for Pokemon anymore. However, when the power plant was originally built, a big part of it was dedicated for Pokemon only. That part of the power plant is there even today, and wild electric Pokemon live there.
In the power plant, you find out that the reason for evacuation was an unknown emission of radiation. The workers feared it could damage their machines and cause explosions, endangering the entire city. But the emission stopped. They said that none of their equipment caused it, so the cause must be somewhere in the Pokemon part of the power plant.
In the Pokemon part, you find some machines, despite the workers telling you there are none. It turns out that all of those machines were used for a "simple" riddle, that, when you solve it, opens up a secret passage. Of course, it might be simple today, but back in 1850, it sure was complicated and required a lot of equipment and space.
The secret passage leads to a room, with a computer in it. Tony says that the computer seems too modern to be from 1850, and that it's probably today's technology. On the computer, there's an option that says "Start emission", meaning that it was a cause of the radiation. There's also a diary-like document, from which you find out that a person with the code name "Stargazer" caused all of this. The reason is to attract wild,powerful electric Pokemon. Below that it says "Rotom has showed up". Sure enough, Rotom can be found in the power plant, but the person with the code name is nowhere to be found. All you know is that someone codenamed "Stargazer" intended to catch powerful electric Pokemon.
The riddle to open the secret passage is explained in this next spoiler. Yes, it's a spoiler within a spoiler, spoilception xD