Waivers for Desert Rock right of way raise questions

Copyright © 2008
Gallup Independent
By Kathy Helms
Diné Bureau

WINDOW ROCK — Partners in the Desert Rock Energy Project are on their way to getting the final document needed from the Navajo Nation for the proposed coal-fired power plant.

Right of way legislation for the project has sailed through the Economic Development and Resources committees but was narrowly approved Wednesday by the Intergovernmental Relations Committee in a 4-3 tie-breaking vote cast by Speaker Lawrence Morgan.

Intergovernmental Relations Committee members Kee Allen Begay and LoRenzo Bates took issue with language in the resolution which states that the Nation will “expressly and unequivocally” waive its sovereign immunity from suit with respect to any dispute related to or arising under the terms and conditions for the granting of rights of way, the assignment agreement, and the consensual agreement.

Another point of contention is the Nation waiving payment of $7.5 million in right of way fees. Under the agreement, the Nation would receive $11.079 million per year for the rights of way. However, because of the economic benefits the tribe expects to enjoy from the project, it would waive $7.5 million of the fees and receive $3.5 million.

The rights of way would be assigned from Diné Power Authority to Desert Rock Energy Co. LLC, a subsidiary of Sithe Global Power LLC — developer of the project along with DPA.

“We started the Desert Rock project in 2003, and with the action on this right of way legislation, we can clearly see the light of the tunnel with regard to the approvals required by the Navajo Nation,” said Nathan Plagens, vice president of Desert Rock Energy Co.

Begay said that as much as he supports economic development for the Nation, he also believes that Navajo lawmakers should abide by the concerns of the grassroots people — the grazing permit holders, grandmas and grandpas “still holding on to their culture and their tradition. ... If we just look at the funding, ‘beso,’ dollar signs, we’re just neglecting and not really listening to our Navajo people.”

Begay, who represents Many Farms/Round Rock chapters also asked how the project would really benefit his community, stating that in the six years he has been on the Navajo Nation Council, he has yet to see any major development.

“The one thing that really bothers me about this development, at the same time, is DPA always comes to the Council requesting for appropriations. These stake holders, these companies, why can’t they invest more in these type of projects themselves rather than asking the Nation for more funding, asking the Nation for more land.

“I don’t want to see another situation such as the coal mine Peabody up in Black Mesa where less than a mile away people today don’t even have electricity or running water to their homes.”

Regarding the express waiver of sovereign immunity Begay said, “As the committee chair for the judiciary, I don’t ‘unequivocally or expressly’ waive our sovereign nation to anybody.”

Bates said he agreed with Begay on the $7.5 million fee waiver. “I find it extremely difficult to see how that would benefit the Navajo Nation. Also, I have an extreme problem with the language ‘expressly and unequivocally’.” He said that sort of language is a strike against the Navajo Nation when cases end up in the Supreme Court.

“It’s one thing to say ‘waive sovereign immunity.’ That in itself is a problem. But to go and add to it ‘expressly and unequivocally’ is not good for the Nation.”

Plagens said the fee noted in the right of way agreement is based on analysis from the Minerals Department. “The issue with Desert Rock is that we have to process electricity for market in Arizona, Nevada, New Mexico, Utah, Colorado ...

“When we have looked at other sites — we’re working on a project in Nevada where we’re paying about $750 an acre — then a rate at $11,000 per acre as declared by the Minerals Department is just not competitive. So what we’re trying to do is negotiate a competitive price so we can move this electricity in a competitive manner.”

He said Minerals’ assessment doesn’t take into consideration that Desert Rock would contribute over $50 million a year in total taxes and revenues.

Regarding the sovereign immunity language, Plagens said, “If something like this goes to the Supreme Court then we’ve got bigger problems than what this agreement is. This limited waiver of sovereign immunity is specifically limited to this right of way agreement.

“Basically this is the same language that we had in the lease which Council has already approved,” he said, adding that they are asking for a direct link to arbitration rather than going directly to court.

DPA attorney Chris Clark-Deschene said they have noted the term “expressly and unequivocally” in several Supreme Court cases, in particular with a case regarding an arbitration between a tribe and an outside developer. He said the high court didn’t dispute the term. “What they looked at was the arbitration itself.”

Deschene said there is an existing document recommended by Navajo Department of Justice which states that no challenges will be brought in a court outside of the Navajo Nation’s jurisdiction. “Those measures DOJ built in with our assistance to protect the sovereignty of the Navajo Nation.”