INDIAN ENERGY DEVELOPMENT, REGULATORY, AND JURISDICTIONAL CONSIDERATIONS
| Jurisdiction | United States |
(Nov 2014)
INDIAN ENERGY DEVELOPMENT, REGULATORY, AND JURISDICTIONAL CONSIDERATIONS
Acting Director
Office of Indian Energy Policy and Programs
Department of Energy
Washington, DC
[Page 11A-1]
PILAR M. THOMAS (Pascua Yaqui) is the Deputy Director for the Office of Indian Energy Policy and Programs at the U.S. Department of Energy. As Deputy Director, Ms. Thomas develops and implements national energy policy and programs related to Indian energy development. Ms. Thomas also works directly with tribes, other DOE offices, and other federal agencies to support tribal energy development goals, and the Office's Indian energy program objectives. Prior to joining the Department, Ms. Thomas served as the Deputy Solicitor for Indian Affairs in the U.S. Department of the Interior, where she provided day-to-day legal advice and counsel to the Secretary, the Assistant Secretary for Indian Affairs, and other officials of the Department on matters related to federal Indian law, tribal law, and legal issues involving Indian tribes. Ms. Thomas was Of Counsel at Lewis and Roca LLP (Phoenix, AZ) in the firm's Tribal Affairs and Tribal Gaming practice groups, where she concentrated her practice in Indian gaming, tribal economic development, and renewable energy. Ms. Thomas has also served as interim attorney general and chief of staff of the Pascua Yaqui Tribe. Ms. Thomas started her legal career in 2002, when she was appointed to the position of Trial Attorney in the U.S. Department of Justice, Environment and Natural Resources Division, Indian Resources Section, where she worked on treaty rights, water rights, and land-into-trust issues. Prior to her law practice, Ms. Thomas worked for 15 years in the financial services industry for a Fortune 250 company. She has over 10 years of management experience in all aspects of corporate operations and marketing. Ms. Thomas received her J.D. from the University of New Mexico School of Law, magna cum laude, and her bachelor of arts degree in economics from Stanford University.
Introduction
Indian tribes are eager, and poised, to take advantage of their abundant renewable energy resources. The U.S. Department of Energy National Renewable Energy Laboratory estimates that Indian lands have over 9 million MW of technically developable renewable energy resources.2 More and more tribes, thanks to increased federal technical and financial assistance, are evaluating, planning and deploying renewable energy projects. Some of these tribes are looking to develop projects for commercial purposes--to export energy resources or power off the reservation for sale to utilities or other buyers. But ever more tribes seek to develop smaller community or facility scale projects to use their energy resources for their own use.
As tribal leaders and officials assess their energy development opportunities, fundamental questions arise about jurisdiction, governance, regulation, and markets and the inherent tensions these may pose to the economic development imperative of energy development. Tribal governments have the inherent sovereign authority to govern and regulate where and how energy development will occur on tribal lands or buildings. Many--although, unfortunately not most--tribes have exercised this sovereign authority by adopting comprehensive environmental review, land use and planning, permitting, and tax codes. A few tribes have begun taking advantage of federal authorities to regulate energy development through Treatment as State status, or under the HEARTH Act. The exercise of these authorities--inherent and federal--combined with state regulatory schemes and market barriers pose new considerations for tribes as they look to develop their energy resources.
Renewable Energy Development: Challenges and Opportunities
Like most economic and infrastructure development activities, the ability to develop renewable energy projects is a function of multiple factors, including, among others, capacity building, access to markets, access to capital, legal and regulatory schemes, and environmental, cultural, and sacred sites protection. Within these factors, a multitude of efforts are in play. To effectively develop renewable energy resources, tribes need to
[Page 11A-2]
fully understand these efforts, and how they are intertwined to promote renewable energy development. For the most part, energy markets and development are controlled through state regulatory authorities. And renewable energy markets--especially innovative market mechanisms--are mostly driven by federal and state-level policies and regulations. Market forces are generally determined by federal and state policies, fashioned around reliable regulatory schemes and incentives to support both large and small projects that attract substantial investment. Many federal and state policies, laws, and regulatory schemes align to promote renewable energy, but in some ways they work at cross purposes for tribal energy development. Environmental considerations, such as climate change, also serve as backdrops for governmental action to promote clean(er), low-carbon energy.
Indian tribes also should play close attention to the market barriers and opportunities for renewable energy development on tribal lands. Commercial scale projects--the power will be exported off tribal lands--are especially driven by federal and state incentives because they have to compete with wholesale electricity prices. Renewable energy policies, such as renewable portfolio standards, net-metering requirements, and qualifying facility requirements, as well as federal and state financial incentives (federal & state tax credits, accelerated depreciation) drive the market. These projects are also challenged by access to transmission, transmission constraints, siting and permitting requirements. Funding and financing these types of projects entail complex deal structures to monetize the tax benefits, and require a buyer, with an executed power purchase agreement, before financing will be available. Lastly, to add to these challenges, there are three sovereigns that may regulate the development of these large projects--tribal, federal and state.
Innovative market mechanisms have also developed to promote smaller scale renewable energy projects. Tribes can take advantage of many of these innovations to deploy more renewable energy projects on their lands, buildings, and tribal members' homes. For example, third-party ownership models, with leasing and power purchase agreements, has resulted in the deployment of hundreds of MW of roof-top solar (the SolarCities model). Public-private partnership models, such as the Morris Model, have allowed local governments to develop renewable energy projects with private, third-party developers. And, many municipal utilities have joined together to invest in large renewable energy projects to diversify their generation portfolio and offer their rate-payers the ability to buy renewable energy. These types of arrangements, and many more like them, have developed in response to the current incentive structures, which some people and governments can't take advantage of. They represent a way for governments, including tribal governments, to take advantage of the benefits of tax incentives through lower power prices.
[Page 11A-3]
As tribes take more control of energy development on their lands--whether for export or internal use--careful consideration and attention should be paid to the implications and impacts of tribal, federal, and state policies and regulatory authorities on that development.
Tribal Governance and Jurisdiction
We start with the well-established rule that Indian Tribes have inherent authority to determine how it will govern its people, lands, resources and territories.3 Indian Tribes exercise these authorities in familiar ways--through acts of their legislative bodies, executive or administrative departments, and judiciaries. Indian Tribes have adopted ordinances, statutes, and codes to regulate development of tribal lands.4 Many Indian Tribes have established regulatory and taxation authorities to control and tax economic activity on Indian lands and to regulate environmental issues. And, Indian Tribes have established tribal court systems to adjudicate disputes that arise over the use of or activities on Indian lands. The degree of formality in action varies by Indian Tribe, but regardless, federal law generally recognizes the validity and supremacy of an Indian Tribe's sovereign acts as applied to an Indian Tribe's members or related to an Indian Tribe's lands and resources.5
Although an Indian Tribe's authority, like any government, is co-extensive with its jurisdiction, Indian Tribes do not possess plenary authority or power. Instead, tribal government authority and jurisdiction may be limited based on a number of factors, including location, land ownership, tribal membership or Indian status, action to be taken, and the tribal government entity to take such action.
When non-Indians engage in activities on Indian lands or non-Indian fee lands within an Indian reservation, Indian Tribes' authority over that non-Indian activity has been delineated by the Supreme Court under Montana.6 Under this rule, Indian Tribes do not have jurisdiction (and thus authority) over non-Indian activities on fee land within the exterior boundaries of the reservation, unless one of two exceptions apply: 1) the non-Indian activity may have a detrimental effect on a tribe's public safety, welfare, economic
[Page 11A-4]
integrity or ability to govern itself; or 2) the non-Indian has entered into a consensual commercial relationship. Despite the limitations of tribal jurisdiction over non-Indians on non-Indian fee land, federal courts acknowledge Indian Tribes' sovereign rights to impose taxes and regulations and authorize the use of tribal...
To continue reading
Request your trial