Clear Sailing for Giant Sioux Wind Farm
This article appeared on Indian Country Media Network in 2017. For more on topics like this, see my book, American Apartheid: The Native American Struggle....
The Yankton Sioux flag snaps in a stiff Plains breeze; the tribe is part of a coalition set to harness the wind. |
A coalition of Sioux tribes is poised to
harness the wind. Long held sacred by the Great Sioux Nation, or Oceti Sakowin,
the wind may soon provide tribal communities with clean, renewable power and
sustainable economic development. “We tribes see ourselves as custodians of the
environment,” said Oceti Sakowin Power Authority (OSPA) board member Dan
Gargan, Rosebud Sioux. “Producing clean energy is something we’ve wanted for a
long time.”
The endeavor has taken a lot of work,
and in the process obstacles have become assets. Oceti Sakowin means “Great
Sioux Nation” in Lakota/Dakota, and its vision encompasses the possibility that
even more Sioux nations in the U.S. and Canada might join the current group—the Rosebud, Oglala, Cheyenne River, Yankton, Flandreau, Standing Rock and Crow Creek Sioux Tribes—according to
Caroline Herron of Herron Consulting, which has been involved in OSPA since its
beginning.
OSPA’s eventual capacity is currently
estimated at about two gigawatts, making it an immense utility-scale project
and the first joint power authority formed in this country in decades. In a Huffington Post op-ed, retired U.S.
Senator Byron Dorgan (D-ND) lauded the project for its innovation and
potential. Dorgan called the northern Plains the “Saudi Arabia of wind power”
and claimed the region could fulfill the U.S.’s entire energy needs several
times over with emissions-free, wind-generated electricity.
Various Sioux tribal associations have
explored the idea since the 1980s. Rosebud has installed solar panels on the
roofs of some homes, with the electricity produced feeding into the home, and
individual tribes have tried setting up wind farms, though these have stalled,
generally because they were too small-scale. “It takes a lot of money to
develop a wind farm,” explained Gargan. “Working together, we tribes can build
on a larger scale, find collateral for loans more easily and identify bigger
purchasers.”
It may be hard for people who don’t live
in the Plains to understand how windy it is, Gargan added. When he installed a
wind-speed meter outside his Rosebud home, he measured frequent gusts up to 70
miles per hour.
Finding advantageous financing and major
purchasers for the large amount of wind-generated electricity OSPA will produce
demanded innovative thinking. The consortium has devised a strategy that will
give it ownership of its facilities and access to major markets.
The Clinton Global Initiative (CGI) is
especially supportive, with President Bill Clinton calling OSPA “one of my
favorite commitments.”
When the project is up and running, Clinton told a 2013
CGI conference in Chicago, additional tribes will realize that green energy can
allow them to earn substantial money, invest in their communities and diversify
their economic base. (President Clinton is shown left congratulating tribal leaders at the conference.)
The Bush Foundation,
Northwest Area Foundation, Rockefeller Philanthropy Advisors and the law firm
Arent Fox have also assisted in the development of OSPA. The Bureau of Indian Affairs helped by
working with the Department of Energy to fast-track OSPA’s incorporation under
federal law.
OSPA will soon select a
developer/operator partner for project completion and set a timeline for future
stages, Gargan said. These include constructing arrays of wind turbines, each
producing one to two megawatts, on the participating tribes’ land. Proposed
sites are being evaluated for wind speed, access to transmission lines and
roads, and environmental and cultural issues. A few sites have been dropped
because of the presence of culturally significant features, nesting eagles and
other factors.
The consortium’s biggest
hurdle was identifying potential buyers for its electricity, according to
Gargan. Local cooperatives providing electricity throughout South Dakota
purchase minimal green energy, so OSPA ended up turning to the far larger
national wholesale market. This in turn means the authority has a long list of
potential customers in more than two dozen central and western states:
investor-owned and public utilities, call centers, warehouse distribution
centers, and huge energy-hungry corporations, like Amazon and Google, that
purchase green energy as part of their corporate mission. In late 2016, Google
announced that renewable energy, primarily wind, would supply 100 percent of
its power needs by this year.
The big companies’ market
share keeps expanding, said Herron: “In 2015, corporations bought more than
fifty percent of wind energy for the first time, which was more even than the
utilities.”
Financing posed
additional challenges—and ultimately opportunities—for OSPA. In the past,
private-equity investors typically offered tribes wind-power deals that
involved leasing tribal land, erecting turbines, taking advantage of federal
tax breaks, paying the tribe royalties, and then, after 10 years, turning the
facility over to the tribe, according to Gargan. The trouble with these
arrangements, Gargan said, is that the investors would receive the lion’s share
of the benefits, then leave the tribe with 10-year-old turbines and no power
purchase agreement in place. Even worse, added Herron, such investors usually
don’t plan a reserve fund for repairing and replacing worn equipment.
It’s a rare tribe that
accepts such a deal. As a consequence, there are very few wind farms on tribal
land, said Herron. That’s despite many tribes being in regions with lots of sun
and wind that could be transformed into clean energy, according to Clinton.
OSPA is looking for a
partner that would be in it for the long haul, put aside money for repairs and
agree to the tribes’ retaining project ownership. The biggest financing hurdle
has been the tribes’ tax-exempt status and resultant inability to take
advantage of federal tax breaks (unlike private-equity investors). To be
competitive without tax breaks, OSPA’s financing model will involve offering
bonds, similar to municipal bonds, with which local governments finance
anything from a new fire truck to a major construction project.
“The bonds would then be
purchased, probably in large chunks, by institutional investors such as pension
funds,” said Herron.
Electricity and revenue
are just the beginning of OSPA’s benefits to participating tribes. Taxes on
materials and construction will deliver additional revenue, and an estimated
550 jobs will be developed with tribal colleges and Tribal Employment Rights
Offices, also called TERO offices. OSPA will help tribal members create related
enterprises, such as the concrete companies needed to pour pads for the
turbines.
Through projects like
OSPA, tribes will contribute to U.S. energy independence while building a
better future for their children, according to Clinton. “The potential for this
is staggering,” he said.
Text and photograph at top c. Stephanie Woodard. Photograph of CGI courtesy Herron Consulting.