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On an American Indian reservation along the Colorado River, a power company and a tribe are blazing a trail in the battle to boost energy supplies.
The Fort Mojave tribe joined forces with San Jose, Calif.-based Calpine Corp. to build the first power plant on tribal land to generate electricity for the wholesale market, the Associated Press reported. The plant is expected to become a model for tribes and energy companies looking for lucrative, fast-tracked projects.
It's an ironic twist for convenience store and petroleum marketers on the West Coast, which have lost sales and market share to Native American tribes on gas and cigarettes, but could now find themselves turning to the tribes for a cheaper alternative energy source.
Federal and tribal governments control whether such plants are built, allowing energy companies to bypass state and local regulations that often slow projects, and to avoid lawsuits by residents.
The South Point Energy Center at Fort Mojave is owned and run by Calpine on land the firm leases from the tribe. The $300 million plant went into operation last month and can provide energy for 540,000 households and businesses in Arizona, California and Nevada. The reservation occupies parts of all three states.
Tribal involvement in the power industry is picking up momentum throughout the West as tribes search for ways to make money off undeveloped land and power companies learn about the tax breaks and other incentives of building on reservations. Projects are under consideration in California, Montana, Nevada and Oregon.
The trend is gaining the greatest momentum in California, where the energy crisis has prompted rolling blackouts and skyrocketing utility bills. At least a third of California's more than 100 tribes are exploring ways to build their own plants with help from investors, or to lease land to energy companies. Some of the power would be for the tribe's own use, some for sale on the wholesale market, the report said.
Congress is considering legislation that would encourage energy development on tribal land by allocating money for power projects. And California lawmakers are considering legislation to help expedite projects and establish purchasing contracts between the state and tribes.
Calpine also has major projects in the works on the Moapa Paiute reservation near Las Vegas and on the Torres-Martinez reservation in southeastern California. Both proposals are still in the federal permitting process.
The incentives for power companies extend beyond affordable lease costs and reduced red tape.
Businesses on tribal land get tax write-offs in the early years and see more cash flow sooner, Swimmer said. There also are tax credits for companies that employ American Indians, and exemptions from some local and state taxes.
Some energy executives dispute suggestions that the federal permitting process for plants on tribal land is faster and less bureaucratic. They say the real motivation is the location.
"They have holdings that are very close to major transmission and major gas lines - two of the most important things that a company is looking for when we're siting a project," Kent Robertson, a Calpine spokesman told the Associated Press.