It's
Clear Sailing for a Giant Sioux Wind Power Enterprise
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The
Yankton Sioux tribal flag snaps in a stiff Northern Plains
breeze above a powwow on the tribe's South Dakota reservation.
The tribe is one of seven Sioux nations participating in the
Oceti Sakowin Power Authority, which is building capacity
to use that wind to supply clean, sustainable energy in a
region experts call "the Saudi Arabia of wind power."
(photo by Stephanie Woodard)
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Called the 'Saudi Arabia
of wind power,' the Great Plains could fulfill U.S. energy needs
several times over with emissions-free, wind-generated electricity
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 in, according to Caroline Herron
of Herron Consulting, which has been involved in OSPA since its
beginnings.
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.
'This has been an obsession
of mine since I was president,' Clinton said.
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At
a meeting of the Clinton Global Initiative in 2013 in Chicago,
President Bill Clinton congratulates tribal representatives,
including those currently involved in the Oceti Sakowin Power
Authority, from right: Thurmond Cournoyer, Yankton Sioux Tribe;
Cyril Scott, Rosebud Sioux Tribe; and Bryan Brewer, Oglala
Sioux Tribe. (photo courtesy Herron Communications)
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The Bush Foundation,
Northwest Area Foundation, Rockefeller Philanthropy Advisors and
the law firm Arent Fox have also assisted 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
challengesand ultimately opportunitiesfor 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.
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