Thin Film PV

Opening tribal lands for renewable energy projects looks set to be the next big thing in renewable project development in the US with wind and solar projects taking the lead in this burgeoning part of the energy market.

Native American tribes have long made a living by building casinos, bingo halls and other gambling ventures on Indian reservations or other tribal lands that were granted tribal sovereignty in the Indian Gaming Regulatory Act of 1988.

For example, the Foxwoods Casino Resort in Connecticut was built in 1992 and is operated by the Mashantucket Pequot Tribe. It is one of the most profitable casinos in the United States.

Replacing lost revenues with renewables

Now, Native Americans are betting on a vastly different game – the renewable energy industry. As the coal plants operated on some tribal lands face costly new regulations, Native American tribes are scurrying to find replacements for potential lost revenue from coal production. Renewable energy sources appear to be tops on their list.

“Native tribes are looking at other ways to use tribal lands to produce wind, solar and geothermal energy, and some of these plans are quite creative,” says Tara Kaushik, a senior associate with Manatt, Phelps & Phillips, who has represented tribal nations. “The Navajo Nation has been quite active with that.”

The Navajo Tribal Utility Authority (NTUA) already has a deal in place with the Salt River Project -- one of Arizona’s largest utilities -- to buy energy from the 85-megawatt wind project the tribe is constructing at the Big Boquillas Ranch.

"This project was conceived with the goal to develop and introduce an energy economy for the Navajo Nation that will directly benefit the Navajo people," Walter Haase, NTUA's general manager, told the Navajo Times. "With this project, the process has started."

According to the Navajo Times, the wind project is the first of its kind to be majority owned by any tribe or tribal enterprise. NTUA has a 51 per cent ownership share of the project and Edison Mission has a 49 per cent share. NTUA supplies electricity, water and natural gas throughout the 27,000 square-mile Navajo Nation, including just under 40,000 electric customers.

Native American tribes are considering all forms of renewable energy as they look to protect themselves from an unpredictable future when it comes to coal plant production. The Navajo Generating Station in Arizona, for example, could be forced to shut down prematurely due to the new rules set by the EPA. According to the Salt River Project, Arizona stands to lose approximately $18bn in gross state product between 2017 and 2044 if the plant closes.

“Coal plants have been a primary source of revenue for a number of tribes in the Southwest, but that is changing,” says Kaushik. “It’s a big deal for the tribes right now because once the coal plants are significantly downsized, or the owners decide it’s too expensive to implement EPA regulations, that will leave them in a significant and severely impacted financial predicament. It’s going to be interesting to see how their energy resources are diversified.”

Hello sunshine

Advocates of building utility scale solar power plants on tribal sites say that federally recognized Native American tribes enjoy major advantages when it comes to locating renewable energy plants on their land. For starters, securing sites and project financing can be streamlined, along with the complex permitting process that exists for non-tribal sites. In addition, most tribes are exempt from paying taxes that can make operation a facility more profitable.

Locating renewable energy projects on many of the tribal sites located in California would enable the state to better meet its aggressive goal of producing 33 percent of its energy from renewable sources by 2020.

Regulatory issues

Earlier this year, members of the Navajo Nation, the Jicarilla Apache Nation, and the Rosebud Sioux Tribe met with Congress to discuss the need to circumvent federal regulatory issues concerning the development of energy projects on tribal lands.  Issues discussed included streamlining approval processes for energy development and federal agency regulatory requirements on tribes and tribal resources. The tribes are also working with the Bureau of Indian Affairs to support legislation that would clear the way to construct utility scale projects on native lands. 

“In the past all of the critics were saying that the regulations are too cumbersome and that you need to meet federal environmental regulations in addition to the requirements of the tribal governments,” says Kaushik. “The tribes have gone to work with Congress and with the Bureau of Indian Affairs to reform those regulations and so that they can spur development on their tribal lands. They are very dedicated to this.”

Existing companies and start-up firms are rushing to establish a foothold in the budding industry. TAWA Power Partners, formed this year, is billing itself as a Native American Indian renewable energy project services company that enables federally recognized Native American tribes to develop, own and operate solar power plants.

“I think it’s an emerging market,” says Kaushik. “Who wouldn’t want to invest in this? It’s an emerging market that’s domestic. It’s in our country and everyone can benefit from this, while the tribes benefit from job creation and new revenue sources.”