By Jeannine Anderson News Editor

Transcription

1 By Jeannine Anderson News Editor Utility regulators in Utah have approved a plan by the Navajo Tribal Utility Authority to buy power lines and substations that will enable the public power utility to bring electricity to about 300 Navajo families more than 1,200 people that have never had it before. In a June 10 order, the Utah Public Service Commission said that the settlement agreement between NTUA and a nearby private utility, Rocky Mountain Power, is just, reasonable and in the public interest. But the commission went further in its June order, adding, We note that we are heartened by the prospect of these transactions facilitating expanded service within the [Navajo] Nation and wish NTUA and the Nation complete success. This is not the kind of language one normally sees in this type of document. The PSC s enthusiasm makes sense, though, when you realize that some of the people in this corner of Indian country, like thousands of others across the Navajo Nation, have been waiting a long time sometimes a lifetime for electricity. In an average year, the Fort Defiance, Arizona-based NTUA connects about 700 families who previously did not have electricity, said the utility s general manager, Walter Haase, in a June 29 interview with the American Public Power Association. This is a life-changing event one that gives a big boost to people s living standard, he said. Haase is a member of APPA s board of directors and is the association s chair-elect for Navajo Tribal Utility Authority crews at work. The tribally-owned utility will be able to bring electricity to more than 300 households in part of the Navajo Nation in Utah, thanks to a deal it negotiated with investor-owned Rocky Mountain Power. Photo courtesy of NTUA For people who have lived for so long without electrical power, getting electricity becomes a day to remember, said Deenise Becenti, a spokesperson for NTUA. Any time we have a family turn on the lights for the first time, you see sincere gratitude on people s faces. In Navajo, our word for thank you is A hee e. When we hear that the thankfulness carries a deeper meaning and tells us that we did our job, Becenti said. Most of the time, this appreciation turns into a celebration. The residents and community will throw a feast and make sure that our electric construction crews are invited.

2 It s unusual, in this day and age in the U.S., to have such large numbers of people who want to be served, but who do not have access to electricity, Haase noted. The Navajo Nation is very big stretching over 27,000 square miles and it costs a lot to string poles and wire across these rural areas, he said. The average cost for NTUA to connect a household is $40,000, Haase said. Becenti noted that it would be incorrect to get the impression that those in the Navajo Nation without a powerline connected to their houses are living in the dark ages. Our people do have access to modern day conveniences every day, she said. However, they may live where they do not have electricity. In most cases, they live where their grandparents and ancestors homesteaded. To them, it is home and will always be home letter by Navajo leader made 2016 deal possible The agreement that was approved by the Utah PSC on May 20 and codified in the commission s June 10 order is the product of negotiations over the last several years between NTUA and investor-owned Rocky Mountain Power, a part of PacifiCorp. To get a sense of its true significance, though, you have to go back to way before NTUA and Rocky Mountain Power began talks in You have to travel in time back more than half a century to 1959, the year that NTUA was created. Coincidentally, that was also the year that Rocky Mountain Power s predecessor, Utah Power and Light, asked the Navajo Nation for a right of way across tribal land so that it could provide electricity to an oil field that had been discovered in that part of Utah. The tribe agreed to provide a right of way, but with the caveat that the Navajo Nation would have the right to buy back the facilities in the future, if it wished to do so. The young lawyer who drafted the 1959 letter laying out those terms was Walter Wolf Jr., who was NTUA s general counsel for four decades and who today, at age 86, still works as a consultant to the tribally-owned utility. I was fresh out of law school happened to be at the right place at the right time, he recalled in a June 23 interview with APPA. Fortunately, the Navajo Nation had an advisor who thought it would be appropriate to grant the right of way, but to make the grant on the condition that, should the nation ever want to acquire the facilities within the Navajo Nation, they could do so, Wolf said. Wolf drafted the letter, which was signed by Paul Jones, the chairman of the Navajo Tribal Council at the time. In August 1959, Utah Power and Light replied with another letter that accepted the terms. The letter agreement granted the power company an easement through tribal land so it could serve the oil field. It also granted the Navajo Nation the right, in the future, to buy back the power company s facilities at depreciated book value, under the rules of the Federal Power Commission (the predecessor to today s Federal Energy Regulatory Commission). The agreement was to expire after 50 years. Now, 57 years later, NTUA is carrying out the tribal leaders idea in reclaiming that right of way and the equipment on it. NTUA hopes to close on the deal by late this year, or early in 2017, said Wolf, who received the American Public Power Association s James D. Donovan Award last year. The award recognizes those who have made great individual contributions to the electric utility industry and to public power. When asked whether, at the time of the 1959 letter, he thought he would ever see the tribe buy the rights back, Wolf replied, I did not. However, over the years, I always recalled that that option was there, he said.

3 Time to exercise that option Walter Haase, general manager of the Navajo Tribal Utility Authority, left, is seen here at a meeting with Navajo Nation President Russell Begaye. Photo courtesy of NTUA When Haase became general manager of NTUA in 2008, I suggested that maybe it was time to exercise that option, said Wolf. There had been three previous attempts, one in the 1970s and two in the 1980s, to acquire the utility assets, but those attempts did not bear fruit. This time, in 2008, the expiration of the 50-year agreement was at hand just as Haase took the utility s helm. This just happened to be the right time, the NTUA leader said. In the meantime, Utah Power and Light had been absorbed by PacifiCorp, which in turn was absorbed by Berkshire Hathaway, the company owned by billionaire Warren Buffett. We sent a letter to Warren Buffett and suggested it would be a fortunate thing for his organization to know we were interested in taking back the rights of way, Wolf said. Lo and behold, we got a letter back from the president of Rocky Mountain Power, inviting NTUA to come and talk over the idea. Starting in late 2009, NTUA began negotiating the complex deal in earnest. Four years later, in late 2013, definitive agreements were signed. Then, in May 2015, in a nearly unanimous vote of 16-1, the Navajo Nation Council gave a green light to the acquisition. Shortly after that vote, which took place at a special session of the council, Navajo Nation President Russell Begaye and Vice President Jonathan Nez signed a letter of support approving the acquisition of the Rocky Mountain Power facilities. A number of amendments were negotiated and last fall, the investor-owned utility filed an application with the Utah PSC asking it to approve the transfer. In May of this year, the Utah PSC held a public meeting in Bluff, Utah. Haase said that meeting was remarkable in that the local Navajo people had the chance, for the first time, to have their voices heard by the commission. On May 20, 2016, at a public hearing in Salt Lake City, the PSC issued a bench order approving the agreement for NTUA to acquire the Rocky Mountain Power facilities. The commission formalized those findings in its written order, which was issued on June 10 (Docket No ).

4 The final amended agreements between NTUA and RMP, which underwent a number of revisions since talks between the two parties got underway in 2009, are clearly the product of laborious negotiations involving numerous parties with substantial interests in this matter, the Utah PSC noted in its order. Indeed, RMP, or its predecessor in interest, and NTUA appear to have been intermittently negotiating this matter for more than 30 years. Rural Utilities Service financing was key As public power, the focus is to make the lives of the people we serve better, Haase said in an interview with American Public Power Association staff on June 12 at APPA s national conference in Phoenix, Ariz., where he underscored the key role that financing from the U.S. Department of Agriculture s Rural Utilities Service, or RUS, played in the transaction. Haase noted that this type of financing is typically cheaper than the use of municipal bonds. NTUA has borrowed money from the RUS several times over the years, Wolf said. The utility took its first such loan from RUS in I was fortunate to be able to negotiate the process for a tribal agency to borrow from the RUS, Wolf said. NTUA was eligible under the Rural Electrification Act as a not-for-profit public power utility. He noted that most municipal public power utilities have tax revenues, and also have the ability to borrow, if they need to finance a project. As a tribally-owned utility, we don t have tax revenues, he explained. We have no borrowing history. The Rural Electrification Act is generally associated with rural electric cooperatives, but the 1936 law was not limited only to co-ops, Wolf said. It also covered the ability to lend to organizations to provide service to rural areas. I believe we were the first tribal utility to negotiate a loan from the RUS, he said. It worked, and NTUA has borrowed money this way ever since. We re now on our 10th or 11th loan, Wolf said. We have not defaulted on any loans. The Navajo Nation is big, Wolf noted. Its 27,000 square miles encompass parts of Arizona, New Mexico, and Utah. A vast territory with sparse customers It s pretty difficult for most people to envision the problems of utility service on an Indian reservation, Wolf observed. The Navajo Nation is spread out over an area a little larger than West Virginia, and we don t have dense settlement centers, he said. Our consumers are spread out, so it s quite expensive to provide service, whether it be electric, water or wastewater service. Many residents do not have electricity, said Davis Filfred, a Utah delegate with the Navajo Nation Council, in a June 24 interview with APPA. There are a lot of places that are just black holes. Every year I have told people, Maybe this year you will plug in your Christmas tree, maybe this year you will plug in your air conditioner. Maybe this year you will plug in your refrigerator and make some ice and have a cold drink. I want everybody living in this century, said Filfred. We have students that do homework by kerosene lanterns and candles. But bringing in electricity requires the installation of many miles of poles and wires, and this is very expensive, he said.

5 Electric crews take care of electrical equipment on the 27,000-square-mile Navajo Nation. Because the territory is vast and the population sparse, it can be very expensive to bring in poles and wires. Here, workers with the NTUA Tuba City District Electric line crew prepare to connect the last leg of a 10-mile construction project that lasted for five months and connected nine families. Photo courtesy of NTUA. It s important that NTUA is an enterprise of the Navajo Nation, said Alton Joe Shepherd, another delegate on the Navajo Nation Council, in a June 24 interview with APPA. We need to do things for ourselves, he said. We need to be in the driver s seat. The standard of living in the U.S. is to have running water and electricity, noted Shepherd, who is chairman of the Navajo Nation Council s Resources and Development Committee, which oversees land management and approves rights of way for the Navajo Nation. Because the Navajo population is dispersed over such an enormous area, though, it is a challenge to provide service to everyone, he said. Details of RMP acquisition Under terms of the deal that was approved by the Utah PSC, NTUA will acquire about 30 miles of transmission lines in southeastern Utah, along with distribution lines and four substations, from Rocky Mountain Power. The Navajo utility will take over electric service to 1,090 RMP customers and will extend distribution service to 325 families that do not have electricity now. Originally, there were approximately 350 families without electricity in the area, Haase explained on June 29. Three and a half years ago, in an effort to make sure the people understood that NTUA was willing and able to provide electric service, the utility obtained the required rights of way for 25 of those families, and also located financing through Navajo Nation community development funds and a Navajo Nation trust fund so that power lines could be built to those homes, he said. Once NTUA had obtained the rights of way and had secured financing, RMP did the build-out to the houses, he said. NTUA expects to take over service to the 1,090 RMP customers who are already connected sometime early next year, Haase said, and estimates that it will take two to four years to hook up the 325 homes that currently have no power. It will take that long, partly because it is an arduous process to obtain the required rights of way, he said. The land is federally owned, and it can take over a year, and sometimes much longer than that, to secure a right of way from the federal government.

6 NTUA has already begun the federal right of way process for about 65 of the families, he noted. The budget for the acquisition is $10 million, including the cost of buying the RMP facilities, integrating them, and going through the regulatory processes that are required, Haase said. NTUA supplies electricity, water, natural gas, wastewater treatment, and photovoltaic (solar power) services to residents throughout its 27,000 square-mile service territory. NTUA serves approximately 39,720 electric customers, 38,328 water customers, 13,692 waste water customers, 7,710 natural gas customers, 210 photovoltaic customers, and communications (25,246 mobile phone customers). The tribal utility authority, an enterprise of the Navajo Nation, also provides assistance to tribal agencies and tribal communities to obtain federal grants to address utility needs. NTUA notes on its website that it has a workforce of 713 regular employees and 10 temporary employees, percent of whom are of Navajo descent. Out of 713 employees, 689 are Navajo.