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St. Regis Mohawks, National Grid reach terms for new franchise agreement

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AKWESASNE, N.Y. – The St. Regis Mohawk Tribe and National Grid announced Oct. 8 they had reached tentative terms for a new franchise agreement that allows the tribe to exit from the utility’s electrical service or to allow the corporation to continue providing electrical services within the Akwesasne Mohawk territory.

“This agreement will make sure that community members and businesses receive electrical service in a timely manner, just like all the other National Grid customers,” said Tribal Chief Barbara A. Lazore. “This is an improvement in our relationship with the company that has provided electrical service to our community for almost 60 years.”

The cooperative agreement concludes three years of negotiations that has resulted in comprehensive terms for electrical service to the community. It establishes a positive working relationship between National Grid and the tribe to go forward and establishes the framework for how electrical services will be delivered to the community completely in compliance with our environmental regulations.

“We will now receive an annual franchise payment from National Grid for the right of way for its poles, lines and equipment,” said Tribal Chief James W. Ransom. “Charging National Grid for the right of way has been something the community has been asking for.”

The payment to the tribe will amount to $71,400 annually and includes a back payment for 2007 and a payment for 2008 once the agreement is signed. The amount is calculated based on what the company would pay in equivalent property taxes to neighboring municipalities where it has its poles and equipment.

“If the community chooses to leave the National Grid system, we will be able to make that choice,” added Tribal Chief Monica M. Jacobs. “That is important to us.”

The terms of the agreement include a provision for the tribe to exit the National Grid system at a total exit fee of $4.13 million for the electric distribution system. This fee will be recalculated at the time of the exit. Should the tribe choose to exit, it agrees to work with the New York State Public Service Commission and National Grid, which is required to obtain the necessary approvals through the Public Service Commission.

Should the tribe exit the National Grid system, the agreement includes provisions in which the utility will help the tribe by maintaining and operating the system for up to two years from the date the tribe acquires the system. The parties also agree to enter into negotiations for a mutual assistance agreement for emergencies and storm-related events.

“There is also a provision to train up to three community members as linemen,” Lazore said. “These will be important positions if we decide to establish our own electrical utility.”

The tribe estimates a new tribal electrical utility company will result in the creation of six to eight jobs, including as many as three linemen. The cost of such training will be determined through additional negotiations between the parties.

“The agreement also provides us access to National Grid poles as we develop our cable, fiber optic and other telecommunication capabilities,” Ransom added. “This provision helps us in coordinating our efforts to provide better telecommunication services to our community.”

The agreement not only provides the tribe access to the poles but helps build a relationship with Verizon, which jointly owns 46 percent of the investment in poles within the community.

“We also included a provision so that community members will not be charged state sales tax for services provided within our territory,” Jacobs said. “These taxes should never have been charged and this agreement corrects that.”

Prior to this agreement, it was up to individual community members to negotiate removing the sales tax charge from their electric bill. Both National Grid and the tribe commit to working together to make the state aware that state sales tax does not apply within the Akwesasne Mohawk Territory.

The tribe has scheduled a special community meeting for Oct. 30 at 6 p.m. at the senior center to review the terms of the franchise agreement. The agreement is expected to be signed shortly thereafter.