Power plants sprout on Indian reservations

Tax breaks abound

approval is routine

March 03, 2002|By David L. Greene | David L. Greene,SUN NATIONAL STAFF

NEEDLES, Calif. - Like other tribes, the Fort Mojave Indians have raked in millions of dollars from gambling in their flashy casino-hotel and smoky slots parlor. Now, they have turned to a lucrative new venture: a power plant.

Smokestacks might never be as ubiquitous as slot machines. But Indian tribes are increasingly looking to them for the same reason they turned to gaming - to generate a level of revenue that was once out of their reach.

The Fort Mojave plant, perched on a sand dune on the 33,000-acre reservation, brings in $4 million a year from Calpine Corp., a San Jose, Calif.-based energy firm. That's as much as the two casinos combined.

Dozens of tribes, mostly in the West, are now courting energy companies. The reason is simple: To build a plant on a reservation, a company must pay a tribe millions in taxes and lease payments. The deal is also sweet for the energy industry.

By building plants on reservations and hiring Native Americans, companies get tax breaks. Calpine, which is close to signing deals with two other tribes, will be getting $20 million in federal tax relief for its $250 million Fort Mojave plant built in Arizona across the river from Needles.

And because tribal lands are sovereign, companies can ignore often-strict local and state environmental laws and win approval for projects with few headaches.

"Plant developers do not have to go through a thousand yards of red tape," said Craig Goodman, president of the National Energy Marketers Association. "It's literally one-stop shopping. You're really lowering your political risk by only having a single tribal council to deal with."

The trend has the backing of the Bush administration, which has called for more than 1,000 new power plants and sees nothing wrong with having some of them built on Indian lands.

But environmentalists and state regulators view the trend with suspicion. They say they fear that tribes, tempted by cash that could pay for services for their impoverished communities, might not fully weigh the environmental consequences. Those who oppose the power plants, they point out, are all but powerless to halt projects on reservations, whose leaders have near-total authority.

"Some areas just can't take any more pollution," said Carl Zichella, the Sierra Club's regional staff director for the West Coast. "Native Americans deserve a lot of leeway. But we can't have people building power plants that are off the political radar screen."

`Worthless land'

Tribal members say they have carefully weighed the financial benefits of plants against the environmental effects - and that the conclusion seemed a no-brainer.

"This was worthless land," Llewellyn Barrackman, a Fort Mojave tribal elder, said of the swath of desert consumed by water-cooling towers and natural-gas tanks. "There wasn't too much debate - it's been a big help."

"We don't just trust anybody," said Barrackman, who at 83 is the tribal council's vice chairman. "We check and find out how their people are. We ask tough questions."

Calpine officials say they chose to build a power plant here because of the proximity to natural-gas pipelines and locations where they can load electricity onto power grids. They dispute the assertions of even some in their industry that the plant reflects their effort to sidestep state regulators or local opposition.

"We go through the same review as everyone, but at the federal level," said Kent Robertson, a company spokesman.

Avoiding local opposition

Typically, new power plants go through a maze of reviews by local or county boards and a state environmental protection agency. State officials can veto projects in the face of too much local opposition or if they conclude that a plant will produce too much pollution in a region with especially dirty air.

But in evaluating power plants for Indian lands, a tribal council fills the role normally played by local and state agencies.

Once a tribe approves a plant, the federal Bureau of Indian Affairs conducts an environmental review and decides whether to approve the lease to an energy company. Bureau officials say they seldom veto a project approved by a sovereign tribe.

Some state officials have expressed concern that the Bush administration will tilt in favor of allowing new plants to be built, given that President Bush has made boosting electricity output a top priority.

They note that the federal government does not always take account of local interests, for example, or of the fact that some areas are already too polluted to absorb a new power plant.

Impact off the reservation

"It's not clear the federal [government] will require the same things states require," said Bill Chamberlain, chief counsel at the California Energy Commission, which has sought an oversight role in the projects on Indian lands. "When there are proposals to do things on tribal lands that would have serious environmental effects off the [tribal] land, a state has a legitimate reason to protect its citizens and its environment."

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