Error executing Powershell commandlets using C#

I have the following code that I have tested and works:

    using (new Impersonator("Administrator", "dev.dev", #########"))
    {
        RunspaceConfiguration runspaceConfiguration = RunspaceConfiguration.Create();
        Runspace runspace = RunspaceFactory.CreateRunspace(runspaceConfiguration);

        runspace.Open();

        RunspaceInvoke scriptInvoker = new RunspaceInvoke(runspace);
        scriptInvoker.Invoke("Set-ExecutionPolicy Unrestricted");

        Pipeline pipeline = runspace.CreatePipeline();
        Command myCmd = new Command(@"C:\test.ps1");
        myCmd.Parameters.Add(new CommandParameter("upn", upn));
        myCmd.Parameters.Add(new CommandParameter("sipAddress", sipAddress));
        pipeline.Commands.Add(myCmd);

        // Execute PowerShell script
        Collection<PSObject> results = pipeline.Invoke();
    }

However, when I try to include the function in a different project so that it is called from a webservice it throws an execption:

    System.Management.Automation.CmdletInvocationException: Access to the registry key 'HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\PowerShell\1\ShellIds\Microsoft.PowerShell' is denied. ---> System.UnauthorizedAccessException: Access to the registry key 'HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\PowerShell\1\ShellIds\Microsoft.PowerShell' is denied.

I have no idea why this is happening. Any help would be appreciated.