By Kevon Storie
There are as many ways for a community to benefit from clean, cost-based hydropower as there are communities WAPA serves. Figuring out how to deliver those benefits to unique customers can pose a challenge but ultimately lead to creative, flexible strategies such as WAPA’s bill crediting and benefit crediting programs.
These programs allow Native American tribes to receive a hydropower allocation without having their own utilities. Under bill crediting, WAPA delivers a tribe’s lower-cost hydropower allocation to the utility serving the tribe, displacing an equal amount of electricity that the utility would have acquired from other, more expensive sources. The tribe designates tribal members to receive the credit from the program on their monthly power bills.
Benefit crediting is calculated similarly to the bill credit, but the utility pays the tribe the difference between the hydropower and the resource the utility would have had to acquire otherwise. The tribe then uses the payment for the benefit of its members. This strategy comes with lower administrative costs to the serving utility than bill crediting.
Tribes choose how to use credit
Currently, there are 53 tribes in WAPA’s Colorado River Storage Project Management Center territory that receive allocations, 46 of them through benefit crediting.
Tribes use their discretion in how to spend their benefit credit, explained Public Utilities Specialist Lyle Johnson who administers the program for the region. “Most use it as general funds for tribal expenses,” he said, “but some apply it to specific ‘public works’ projects.”
The Alamo Navajo chapter in Magdalena, New Mexico, used the money to buy a backhoe for its residential water utility, for example.
“Their old backhoe kept breaking down,” explained Johnson. “Their monthly credit was just enough to cover a new one.”
The uses of the benefit credit are as varied as the imagination—and the needs—of the tribes receiving it. For the Ramah Navajo chapter in west central New Mexico, the unrestricted revenues have funded tribal land expansion, economic development initiatives and matching funds for infrastructure projects.
The WAPA payments represented more than 5 percent of the total construction costs of a new tribal corrections facility and were used to rehabilitate a self-sustaining well.
The Ramah Band’s future plans for its benefit credit include investing in a fiber optic network to bring technology and communication to the community. “The goal is for the tribe to become the owner of the fiber-optic lines so we can bill for the service,” explained Ramah Band Chief Financial Officer Earla Begay. “Those funds, in turn, can be used to support other vital services.”
Other tribes, such as the Acoma Pueblo, west of Albuquerque, New Mexico, are putting their credit toward establishing their own utilities. Launching a new utility is a lengthy, expensive and complicated process, yet many tribes are willing to go through it to gain energy independence and self-sufficiency.
The economic and logistic barriers to setting up a tribal utility are many—acquiring a distribution system, obtaining power supply contracts or building or investing in generation and hiring or training staff.
CRSP MC has five tribal utilities among its customers with a sixth preparing to start service in January 2020 and a seventh currently building transmission. In many cases, benefit crediting has helped tribes move toward greater energy independence, either with or without a self-owned utility.
Cooperation removes barriers
In 1995, adopting the Energy Policy Act allowed WAPA to make federal hydropower available to tribes, but that alone was not enough to overcome the obstacles to delivering it.
WAPA engaged in an extensive public process, working with tribes and their servicing utilities to develop procedures that allow tribes to receive an allocation regardless of their utility status. The first was bill crediting, but some local utilities found that administrative costs of the program canceled out the savings of the lower-cost resource. The benefit crediting strategy provided an alternative that worked for many tribes as well as their utilities.
The cooperation of power providers is essential to the success of these programs. The arrangements allow some WAPA customers, such as the Navajo Tribal Utility Authority and the city of Page, Arizona, to save on wheeling and other transmission charges.
WAPA also allows tribes to pool their allocations with other utilities to benefit both entities. Other power wholesalers, including Tri-State Generation and Transmission Association and the Salt River Project, deliver the benefit to tribal customers simply as part of doing business.
Benefit and bill crediting represent the kind of collaboration and innovation that will be increasingly essential to navigating the future of the electricity industry. Fortunately, WAPA and its customers have already shown that they know how to seek, share and partner to provide value to stakeholders across the West.
Note: Storie is a technical writer who works under the Wyandotte Services contract.
Last modified on March 8th, 2024