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Yakama Nation starts utility company

TOPPENISH, Wash. - Tribes are taking their power back in more ways than one.

In an ambitious program to make the tribe more sovereign and prosperous, the Yakama Nation recently formed its own power utility company, Yakama Nation Power. The tribe, which is currently served by Pacific Corp. in Portland, is in negotiations with the utility to buy its entire electrical distribution system serving approximately 16,000 people in the Yakama Valley area.

The nation is the second tribe in the Pacific Northwest to take advantage of a preferential customer agreement by Bonneville Power Administration to start its own utility company. The Confederated Tribes of the Umatilla Indians has plans that take advantage of the BPA's offering to public utilities, districts and public bodies. By creating its own private utility, the Yakama Nation stands to gain 42 megawatts of power from the BPA between October 2001 and October 2005. This translates into a savings of almost $20 million that can be passed along to customers.

"We identify a bit of savings for residential customers, but I think the biggest savings will probably accrue to the commercial and industrial users," says Preston Harrison, economic development coordinator for the tribe. "We'd like to leverage that into economic development, enticing more people to move here to the reservation to establish businesses. That's our strategy."

The tribe has until October 2005 to get its private utility company up and running. But Harrison says that the tribe is focused on a start date around October of 2001.

The relative high risk of starting a utility company is offset by a couple of considerations. One is local control. Pacific Corp. is reducing its personnel in the Yakima area and has closed two administration offices on the Yakama Reservation in the past two years. Harrison points out that with a service base in Yakima, it is at least a 40-mile round trip to the reservation for repairs and service to the tribe.

Certainly one of the other main benefits will be tribal employment.

The department of economic development will be starting a five- to 10-year training program for tribal members who want to get involved with Yakama Nation Power. Job training will cover every aspect of the utility business, including administration, electrician jobs, line jobs, auditing, dispatch, sales, maintenance and service. Although there is no estimate on the number of jobs the utility will employ, it will make a significant impact on the local economy.

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"I think were going to be looked at as a model," says Arlen Washines, chairman of the economic committee for the tribe. "I think we've proven within the last few years that we are more capable and are able to develop and establish and run these kinds of projects in a profitable way. ... There's a lot of people looking at us and watching us, hoping that we are successful. So we're working very hard to not let them down."

Even more ambitious is the tribe's long term plans to potentially manage two dams on the Columbia River.

The Yakama Nation has asked federal regulators for permission to file a competing license application for the Priest Rapids and Wanapum dams being operated by the Grant County Public Utility District. The district's license for the dams expires in 2005, and the Yakama Nation has gone to the Federal Energy Regulatory Commission seeking "intervener status" in the re-licensing process.

If the tribe is successful in its bid, it will be able to use the dams to create their own electrical power to feed their distribution system, as well as sell power on the open market.

At recent meetings in Washington, D.C, tribal council members expressed concerns about the current dam operations and management of fish habitat and fish runs with representatives of the Federal Energy Regulatory Commission. For years the tribe believed the dams could be run in a more environmentally conscious fashion.

"If you look at the record, (Grant PUD) mitigation efforts came about reluctantly because of litigation," says Harrison. "It's not something that they did to help the fish, it's not something they did to help the fish habitat, it's not something they did to help the Indian nation ... they did it because they didn't have a choice."

Operating the dams, which produce enough hydroelectric power each year to supply Seattle, would be a big stretch for the Yakama Nation in terms of manpower and sheer economics. If Grant PUD loses its license to the tribe, the company would be eligible for compensation. Initial operating costs, before profits, would also have to be shouldered by the tribe.

Most officials think it unlikely the regulatory commission will revoke Grant PUD's license. The company has operated the dams since they were constructed 50 years ago and the tribe has no experience managing hydroelectric facilities. But time is on the tribe's side. If the commission approves the tribe's application to file, the tribe would have until 2003 to complete the application process. By that time, if all goes according to plan, the tribe will have two years experience in the utility business and will have moved a long way in terms of economic viability.

"We're looking at moving into the new millennium," Washines says. "I think ... it's an opportune time to show other people, not only in our country but in the world, what our capabilities are and what we're able to do in handling business."