Tribes Urged To Explore Energy Options

Megawatts could become megabucks for tribes willing to explore the potential for a new kind of “red power,” attorney and business consultant Margie Schaff said Wednesday.

The tribes’ unique status and the deregulation transforming national energy markets open opportunities that have yet to be fully explored, she told a Spokane gathering of tribal leaders and utility officials.

Schaff said the options include everything from forming tribal utilities to creating regulatory bodies that would replace state oversight of the companies that provide not just electricity, but water, natural gas and other services as well.

“We can create anything we want,” she said. “Think creatively.”

Schaff said she is working with the Denai Power Authority, an affiliate of the Navajo nation in Arizona, on a powerline that would transmit electricity from New Mexico to Nevada.

The $400 million link would be the largest utility project ever undertaken by a tribe, she said. Denai Power will own at least 51 percent, she said, with the tribe itself floating a tax-free bond issue to finance construction.

Schaff said many businesses are anxious to form joint-ventures or other partnerships with tribes because of their sovereign status and preference in selling energy to federal government entities.

Tribes have yet to seize that opportunity, she said, noting that Washington Water Power Co. is one of a few utilities that has expressed interest in working with reservation officials.

Schaff said tribes in the Missouri River Basin have scored a notable success in securing 4 percent of the power generated by its waters.

Those kilowatts cost about one-third the price of those on the open market, she said.

The allocations, when they become available in 2001, will cover about 20 percent of the needs on the reservations, she added.

Although the tribes have many options available to them, Schaff cautioned that reservation authorities should move forward carefully.

Avoid any moves that would compromise tribal sovereignty, she said, or jeopardize tax and regulatory independence.

Schaff said the goal does not have to be new revenues or cheaper rates for tribal members. Officials on some reservations may instead want to use the flexibility allowed by deregulation to develop resources and increase employment, she said.

Bob Gough, a University of South Dakota Law School fellow, said the tribes can at least become more sophisticated energy consumers, perhaps asking utilities to bid on the right to serve all residents and businesses on a reservation.

“Tribes are in a very interesting and powerful position,” he said.

But he added that Native Americans, if not proactive, will find others mapping out their energy futures.

“Tribes cannot be complaisant,” Gough said.

The conference continues today at the Ridpath Hotel.

, DataTimes