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Tribe Is Now An Owner Of The Power Grid

Above Photo: David Prasad, Creative Commons.

Former Morongo Band Chairman Robert Martin said ownership of utility lines could be a new model for tribes.

A news release includes some almost hidden news. The lede: “Southern California Edison, one of the nation’s largest electric utilities, has completed its West of Devers transmission lines.” The company said the deal was important because it added more power, renewable and battery energy storage to serve Southern California.

And, as Kevin Payne, the utility’s president put it, the new lines will make it easier to distribute “energy resources like rooftop solar and battery energy storage” and “will contribute to decarbonizing our electric infrastructure, large-scale generation and reliable delivery of renewable energy will be vital to achieving California’s ambitious climate goals.”

OK so far. Reading further down it’s clear that a tribe is involved with the project. A new company, Morongo Transmission, owned by the Morongo Band of Mission Indians, will invest in the project and that’s what allowed Southern California Edison to build the $740 million project across tribal lands.

This is where the story gets interesting. The Morongo Band is now an owner of the power line that crosses its lands.

“These rights of way were coming due and we had a tenuous relationship with the power company at the time because they just didn’t appreciate what a tribe was and they were going to come and power their way through,” said Robert Martin, who retired as chairman of the tribe at the end of June. “So over a period of several years, we put together a team that we negotiated with the state.”

The state was interested in the utility project because it was bringing green power from solar into the grid. The tribe, the state and Southern California Edison then “worked out a deal with them where they would take down some of the old lines that have been there for maybe up to 50 years and replace them with newer ones.”

But the tribe wasn’t interested in a traditional utility right of way. The Morongo Band wanted ownership.

Tom Tureen is an attorney who has worked on land claims and has been an investment banker. He saw the potential for a different kind of deal. Tureen helped the tribe shape the deal.

The utility company really needed this right of way because the lines traveled through Banning Pass, a critical corridor.

“You know how those mountains sit there, but you really can’t go around it,” Tureen said.

Some 50 years ago the federal government gave approval of the lines, even though there was no federal law allowing a company to condemn tribal land.

“So we sued the federal government to force them to sue the state,” Tureen said. The idea was to make the company work with the tribe instead of trying to ignore it. Congress got involved in 2000 and instead of passing a new law, urged the company and the tribe to find a way to work together.

Tureen had helped tribes purchase the Dragon Cement Company by the Passamaquoddy Tribe in 1984 and then the buyout of Phoenix Cement by the Salt River Pima-Maricopa Indian Community in 1987.

“And I said to myself, oh, maybe there’s something in that structure that can break this impasse,” he said. He knew some people with Edison and asked, “why don’t you let the tribe invest in this upgrade?”

That’s the deal that came together. The tribe had the corridor and created Morongo Transmission, LLC., to invest some $400 million or up to 50 percent of the project. That’s all been approved by the Federal Energy Regulatory Commission.

The deal will be “hugely profitable” for the tribe but will not cost the utility’s ratepayers any more than it would have cost without the tribe’s involvement. Because of the way utilities are structured, the very right to invest in a project is valuable.

Thus Morongo Transmission gets the same revenue that Edison would have received and will earn a profit based on a formula. And Edison saved money in the deal because it did not have to pay as much as $500 million for the right of way (since it does not own the lines, the tribe does).

“It’s a wonderful story. I’m very proud of it,” Tureen said.

There are lots of wins here. The tribe has ownership of the power lines that cross the reservation. Southern California has three times the access to clean power sources. Southern California Edison says the project was completed five months early and well under budget for the 48-mile project from near Palm Springs to Vista and San Bernardino substations (tripling the capacity of power delivery in the area).

The project was completed “in an environmentally beneficial way by rebuilding within a corridor containing existing transmission lines, despite the unique operational challenges of this approach,” the company said. “The corridor also passes through the reservation trust land of the Morongo Band of Mission Indians, a key partner with SCE in its bid to obtain environmental permits.”

Former Chairman Martin said ownership of utility lines is a new model. “We’re willing to share the model with any tribe that has this issue across the country. And there’s thousands and thousands of miles that go through reservations.”

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