In an unprecedented partnership, six Sioux Tribes commit to form the Oceti Sakowin Power Authority, a Multi-Tribal Power Authority, and to designate Tribally-owned land for wind farm and transmission facilities development. This Commitment encompasses the establishment of the Oceti Sakowin Power Authority as well as the pre-development work, consisting of technical and economic feasibility studies, for the wind power and transmission project.
The Oceti Sakowin Power Authority will be a non-profit, quasi-governmental entity that is managed by a Board of Directors comprised of Member Tribe representatives and a professional staff. The Power Authority model allows for surplus revenue to be distributed to the member Tribes. The Authority will hire consultants and advisors to design, develop and operate the generation and transmission system; identify large power purchasers; advocate on its behalf in negotiations with Federal agencies (e.g., DOI, DOE, IRS); and design, construct and execute the wind power project credit structure; while encouraging training and jobs opportunities for Tribal Members and local communities.
While a new concept in Indian Country, municipal power authorities are well-established regional solutions to public energy needs - over 30 states have joint powers authorities or public power districts that provide retail and/or wholesale electric service. A joint powers authority of this scale, however, has not been done for almost 30 years in the United States and has never been done for Tribal power projects before. The joint powers authority model may be replicated by Indian Tribes in other regions of the country to develop their renewable energy resources, as well as in other areas of economic development.
This Commitment is the first phase of a longer-term project (5-10 years) to finance, develop and operate a 1,000 MW+ utility-scale wind power and transmission system across the South Dakota Sioux Reservations. By joining together, the six tribes can build a large-scale, world-class commercial wind project and succeed in contrast to past stalled efforts by the Tribes to build small, independent wind utility projects. The utility-scale project proposed will generate power up to 1 GW or more to start with the aim to attract large power purchasers and generate enough revenue to pay for transmission facilities. It is estimated that upon completion, the wind project will power approximately 295,000 households with clean, renewable wind energy and generate 3,300,000 MWh of clean electricity annually. In addition, the project will result in 550 clean energy jobs created or filled by the wind development project (including 50 full-time jobs and 500 part-time jobs). Additionally, the project will employ the issuance of tax-exempt and taxable bonds, which, in contrast to traditional private equity finance, will uniquely allow for 100% tribal ownership of the project. Total project costs (beyond this Commitment) are currently estimated to be $1.75 B -$3.0 B.
In Year 1, the Tribes will establish the Multi-Tribal Power Authority and Tribal supporting governance structures at the Tribal level (e.g., Tribal Utility Commission, Tribal Power Authority/Public Utility, etc.); June 2013 - May 2014
In Year 2, The Multi-Tribal Power Authority will complete the technical and economic feasibility studies for a multi-Tribal power generation and transmission system (i.e., site-specific resource assessments, preliminary environmental assessments, technology analysis, preliminary system design, power purchase and interconnection agreements, project credit structure); June 2013 - May 2015
This Commitment, including the establishment of the Multi-Tribal Power Authority and the pre-development work will aim to be completed by May 2015. This will also include the efforts to raise initial start-up funds.
Per the overall intent of the project, the next steps (to be made in a subsequent Commitment), would be for the Authority to issue the first tranche of bonds (June 2015) and start development work on the multi-Tribal power generation and transmission system (i.e., detailed engineering drawings, environmental assessments, interconnection assessments, permits and approvals).
The bonds will be based on the credit of the power purchasing agreements (PPAs), requiring the Authority to negotiate long term agreements with highly credit worthy purchasers such as utilities, large corporations or government agencies to satisfy the prospective bond buyers. This approach will require the Authority to export the bulk of the power generated to large customers in other markets seeking wind power such as California, Colorado or Minnesota. Over time, the Authority anticipates being able to provide more affordable, renewable energy to its member Tribes.
The partners predict that Year 4 will include the completion of development work (including construction plans and agreements) between June 2015 - December 2016; and start phasing in construction (i.e., site preparation, turbine manufacturing) for the multi-Tribal power generation and transmission system. Year 5 will include the continuance of the multi-Tribal power generation and transmission system construction per schedule (i.e., install and connect power generation and transmission equipment) with the potential of bringing some wind farms online by year end if transmission needs permit (i.e., commission power stations); January 2017 - May 2018
The Dakotas have some of strongest and most reliable wind resources in the United States. Significant wind farm development has occurred in the area: 13 commercial wind farms have been built in North and South Dakota, and over 50 more in neighboring states of Iowa, Nebraska, Minnesota, Montana, and Wyoming. Unfortunately, the Indian Tribes have been unable to take advantage of this opportunity.
The nine Sioux Tribes in South Dakota have been working independently of one another but diligently for more than a decade on developing individual wind farms on their own. The Tribes have encountered significant barriers to implementation. Obtaining power purchase agreements (PPAs) for these small-scale commercial projects and navigating bureaucracy has proven to be difficult. In addition, the transmission line infrastructure on or near the Reservations for commercial projects is inadequate.
Moreover, the restrictions common with traditional methods of private equity financing limit the Tribes' ownership of the assets, and often, make the project's cost prohibitive. Wind power development in the US has been largely driven by the wind production tax credit that cannot be utilized by tax-exempt Tribal governments or transferred to taxable partners. As such, the Tribes have been put at a disadvantage in attracting projects to their Reservations and typically have to consider lease arrangements with private developers. To date, only one utility-scale wind power project, a 50 MW wind farm on the Campo Reservation in California, has been deployed on Tribal Lands and the Tribe earns less from the lease arrangement with their business partners than the county receives from taxing these same businesses.
This Commitment to Action comes from a long history of the Tribes working to advance their rights and develop sound energy and environmental policy. The Oglala and Rosebud Sioux tribes established the Lakota Oyate Energy Commission in the mid-1980s to explore treaty rights in the Missouri River for social, environmental and economic development. The Commission established a shared working framework with model utility, environmental and land management codes. This cooperation led to the formation of the MniSose Intertribal Water Rights Coalition in the early 1990s, encompassing 28 Tribes, to secure the first allocation of low-cost federal hydropower.
Because the hydropower opportunity moved beyond water rights, the Tribes founded and chartered the Intertribal Council on Utility Policy (Intertribal COUP) in 1994 to explore ways for Tribes to build renewable energy projects to meet local needs and generate power for distribution in other regions of the US. The Intertribal COUP now represents 15 Tribes in the Upper Great Plains region and has advocated for and expanded transmission access, energy efficient home building, and capacity building and training on the Reservations, as well as conducted wind feasibility studies and demonstration projects on multiple Reservations.