Navajo community banks on proposed solar array

April 26, 2012 - 3:15 PM
Renewable Energy Tribes

This March 13, 2012 photo shows the border of the Navajo community of To'Hajiilee, N.M. The community has received funding from the U.S. Department of Energy's Tribal Energy Program for a planned 30-megawatt solar photovoltaic plant. Once constructed, the plant stands to be the largest photovoltaic array on tribal land in the U.S. (AP Photo/Susan Montoya Bryan)

TO'HAJIILEE, N.M. (AP) — This flat, dusty stretch of prairie in central New Mexico is where the leaders of a remote, sparsely populated American Indian community envision a sea of solar panels capable of producing enough electricity for more than 10,000 homes miles away from the reservation.

The To'Hajiilee solar project is one of 19 energy projects that will share in $6.5 million recently awarded by the U.S. Department of Energy to spur renewable energy development on tribal lands. About two-thirds of the money is earmarked for tribes in the West, and most of that will be going toward getting projects in New Mexico and Arizona off the ground.

Over the last decade, $36 million has been doled out for nearly 160 projects from Alaska to Maine as part of the DOE's Tribal Energy Program. This year's grants come as Congress considers new measures aimed at reducing the bureaucratic hurdles tribes face in developing their resources and as the Obama administration looks for ways to speed up the leasing of land for clean energy projects.

At stake is a wealth of untapped potential.

With tens of millions of acres held in trust for tribes, experts say Indian Country has the potential to supply more than four times the nation's electricity needs with solar. Wind resources blowing across tribal lands could meet another 14 percent of the need.

"Just huge, absolutely huge" is how Michael Utter, chief executive of the nonprofit consulting corporation Rural Community Innovations, describes the potential.

Utter and Oregon attorney Doug MacCourt are among the technical, financial and legal experts helping tribal communities such as To'Hajiilee become engaged with energy generation and transmission.

Renewable energy development offers some of the same glimmers of economic salvation and self-determination as the casino boom did earlier for some tribes. However, the experts say it's much harder for sovereign tribes to break into the energy market because of capital limitations, government regulations and investor perceptions.

"One of the real challenges is how to you get the outside world to understand these are players just like anybody else in the business," MacCourt said. "They're bringing some very valuable assets to bear, especially in the western U.S. where most states have statutory mandates they have to meet for renewable portfolio standards."

The assets are clear at To'Hajiilee — a wide open, sunbaked expanse that sits right under buzzing power lines that lead to New Mexico's largest metropolitan area.

The To'Hajiilee project — dubbed Shandiin Solar, the Navajo name for sunlight — would be the largest utility-scale solar photovoltaic array in the U.S. on tribal land, MacCourt said. Once a power purchase agreement is inked, construction would take as little as nine months.

To'Hajiilee's economic development team and SunPower Corp., the company helping develop the $124 million project, are talking with utilities, local municipalities and the federal government about purchasing the electricity from the array.

"I think if we're able to find a power buyer fairly quickly, we certainly ought to be breaking ground this fall. That's our goal," said Rob Burpo, president of First American Financial Advisors, Inc., one of the consulting groups working with To'Hajiilee.

The site has already been transformed into desert pavement by months of drought and relentless spring winds.

Her boots covered in fine yellow dust, Delores Apache, president of To'Hajiilee Economic Development Inc., walks across the spot where the solar panels will be situated.

For her, the project is about more than gaining a foothold in a new industry. She ticks off a list of what revenue from the plant would mean for her community: a daycare center, programs for senior citizens and veterans, better roads, more efficient wells for drawing water, language preservation programs and scholarships for youngsters.

"It's going to mean a whole lot," Apache said. "We have no means of economic development. No dollars. We don't have anything at all."

The building where To'Hajiilee residents hold their community meetings has been condemned for more than 15 years. Still, Apache said they make due during winter meetings by making sure the elderly are wrapped in blankets and the fire inside the building's small wood stove is stoked.

To'Hajiilee isn't alone. Tribes across the country are plagued by poverty, high unemployment — in some cases more than 50 percent — and access to health care and education often require long, bumpy rides off the reservation.

And in many parts of Indian Country, basic services such as running water and electricity would be considered luxuries.

Without the seed money provided by the DOE funding, Utter said it would be nearly impossible for communities like To'Hajiilee to get energy projects off the ground.

Still, the sheer potential in Indian Country means the energy market will not be able to ignore tribes much longer as the country's appetite for electricity continues to skyrocket, MacCourt said.

In northwestern New Mexico, where coal, oil and natural gas have been the economic drivers, the Navajo Nation plans to use its share of the DOE funding to explore the potential for developing up to 4,000 megawatts of solar power.

Jemez Pueblo in the mountains of north-central New Mexico has plans for a 4 megawatt solar farm.

In North Dakota, the Standing Rock Sioux Tribe will be embarking on a feasibility study to support the development of at least 50 megawatts of wind power. In Arizona, the San Carlos Apaches, Gila River Indians and Pascua Yaqui Tribe are looking to solar.

A massive wind project is planned by the Penobscot Indian Nation in Maine, and biomass-fueled power plants are being considered by tribes in Montana and Minnesota.

The resources might be different, but the thread connecting the projects involves an effort to craft leases and other agreements with developers to ensure Native Americans can reap more benefits than those provided by past coal and uranium deals.

"There's a strong desire in Indian Country to step out of the role of just a landlord that is collecting rents to being involved in the equity ownership," MacCourt said.

Erny Zah, spokesman for Navajo President Ben Shelly, said tribal officials are working to revamp an energy policy that dates back to the 1980s.

"Three decades later, energy production has changed immensely and so has our view of energy," Zah said. "We're looking now to become actual partners and producers rather than being dependent upon outside companies giving us lease fees and royalty fees. We're looking to be a player rather than being a dependent."

The 30-megawatt solar photovoltaic plant planned for the outlying Navajo community of To'Hajiilee would cover more than 200 acres. Financing options include tax incentives, loan guarantees and bonds that could be used by utilities to pay for the power for the next 20 years. To'Hajiilee is working with an investment bank to finalize a financing model.

The tribe signed a lease agreement in March and a limited liability company has been formed to take care of ownership, financing and other legal obligations. Federal officials have also signed off on an environmental assessment.

A couple of historical areas will be protected and grazing will be allowed to continue throughout much of the area.

Five years in the making, Apache has hosted meeting after meeting to keep her fellow community members abreast of the progress and has met with attorneys, energy experts and financiers around the country. Despite feeling worn out at times, she said knows she has to keep going to make the solar array a reality.

Scanning the southern horizon of her homeland, she pointed to the base of the hill where the solar panels would stop. She then spotted a hawk soaring overhead.

"Look at that," she said. "Now that's a good sign."

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