Tribal Utility Development Energy Development And Services On Tribal Land

With over 19 million acres of reservation trust lands in the state of Arizona, and approximately 40 percent of the renewable energy resources in the state,1 the 22 federally recognized Indian tribes are uniquely positioned to take advantage of their energy resources to promote more energy development—especially clean energy— and improved energy services to tribal communities. Five of those tribes—Navajo, Tohono O'odham, Ak Chin, Gila River Indian Community, and Fort Mojave—have been operating tribal electricity utilities for decades.2 More and more tribes in the state have begun evaluating the economic and technical feasibility of operating their own electricity utility.

Benefits of Tribal Electric Utility Ownership

A few of the major economic benefits of tribal electric utility ownership and operation include the following.

Tribal Sovereignty and Control

Many Arizona tribes and tribal members have expressed substantial concern over climate change impacts, clear air issues, greenhouse gas emissions, and rising electricity costs. Through a tribal utility, these tribes can reduce their dependence on fossil fuel electricity (such as coal and natural gas), increase their use of renewable energy and distributed energy resources, and reduce electricity costs through the acquisition of electricity of their choosing.

Furthermore, a tribal utility can be a vehicle for developing tribal renewable energy resources for both on-reservation and off-reservation use.3 This provides the tribe with a greater degree of control over the development of those energy resources, while maintaining a separation of effort between the tribal government and the tribal utility's enterprise efforts.

Cost Reduction and Management of Electricity Costs

A tribal utility can control its electricity costs through access to the wholesale electricity market. As the regulated utilities and SRP continue increasing their retail rates, the wholesale costs of power have stayed relatively flat.4 Furthermore, tribes that are serviced by incumbent utilities—whether investor owned like APS, rural electric cooperative, or a public power company like SRP—lack control over both the source of power and the price they pay for it. A tribal utility can directly access the wholesale market, or negotiate for long-term electricity contracts, that will most likely result in lower power costs for the tribal government, enterprises, and tribal members who live on the reservation.

Revenue Generation and Job Creation

Instead of making payments to outside utilities, the tribal government, enterprises and members will make payments instead to the tribal utility. These revenues would...

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