Desert Rock rights of way raise some questions

Copyright © 2009
Gallup Independent
By Kathy Helms
Diné Bureau

WINDOW ROCK — Proponents of the proposed Desert Rock power plant will spend the next couple weeks coming up with answers raised by Navajo Nation Council delegates during last week’s winter session regarding the assignment of rights of way to Diné Power Authority.

Resources Committee Chairman told the council that the agreement primarily requests one right of way approximately 24 miles long that would extend from the proposed Desert Rock site across the San Juan River and connect to a substation near Hogback, providing a market opportunity to permitted assignees for the power generated.

The other right of way would be 14 miles long and extend from the proposed plant site to the Four Corners Power Plant. Arthur said it would serve as “a jumper cable between the two plants.”

“If the power plant is built and ready to go, it would need a form of energy and power to kick over the various components that are needed to begin the power plant operation, and this is where this connection is a necessity. It would look to Four Corners Power Plant to provide them the power to start it and begin the operations at Desert Rock.”

Delegate Jerry Bodie of Sanostee Chapter voiced a concern echoed by several delegates regarding language in the resolution which states that “the Navajo Nation expressly and unequivocally waives its sovereign immunity from suit.”

In addition, Bodie said that out of the 43 permit holders, four have not agreed to the right of way. “Once we pass this, is DPA going to bully them to sign the consent? At our local level, when one person says no, nothing goes.

We’re playing favoritism. We’re giving up more than half of the right-of-way fee to the company, and yet we’re going to be in a deficit of $33 million.”

Delegate Edmund Yazzie wanted to know what compensation the permit holders are getting, while Leonard Chee pointed out that the proposed legislation does not do just one thing, it does several things with one action.

“Due to the lengthy content of this document I would like to see further legal interpretation of what this language outlines, such as on eminent domain and what happens in those cases.”

Lorenzo Curley said he had tried to read the documents and “they’re very complex. I just wonder whether my fellow colleagues have sat down and pored over these documents and understand. ... I think it’s fair for our people that we take the time to answer these questions.

Let’s not be blinded by dollar signs and give away the interests of our people.”

Delegates’ questions led to the resolution being tabled for three weeks, before it comes back to Council in a special session.

Although it is widely assumed that developers of the 1,500 megawatt coal fired power plant, Sithe Global Power/Desert Rock Energy Co. and Diné Power Authority are partners in the project, for the assignment agreement of the rights of way, the resolution states, “No term of this assignment agreement shall be so construed as to provide that a partnership exists between DPA, the Navajo Nation and Desert Rock.”

The Navajo Nation would assign rights of way to Diné Power Authority which then would assign the rights of way to Desert Rock Energy Co. and permitted assignees — a list of 30 utility companies largely in Arizona, California and Colorado that might acquire an undivided interest in the Desert Rock Energy Project.

Nathan Plagens, vice president of Desert Rock Energy Co., said in response to delegates’ questions regarding the waiver of sovereign immunity that they have worked with the Navajo Nation Department of Justice and DPA for the last two years negotiating terms and developing a condition “that protects the Navajo Nation but still yet makes the contract appealing to folks like the banks who will be loaning money and to some of the permitted assignees that may own part of the plant so they feel comfortable that the Navajo Nation, if there’s a dispute, will be at the table to resolve these disputes.”

Plagens said all activities related to permittees, including compensation, is done through the Navajo Nation Land Department. “There were 43 people that were noted as having some right to the land, either as a grazing permit, a home site lease, a farm plot.

“Ninety two percent of the people that could sign have consented. There are two farm plot folks that did not.

There’s three permittees’ interests in probate, one permittee is in a nursing home, and two farm plot holders did not sign. BIA regulations require only 51 percent of the permittees to sign. The Navajo Nation does not have a law that sets a particular percentage of permittee consents for them to consider.”

Compensation for those that did not sign would be held in an escrow account until they do sign.

“The eminent domain language protects the Navajo Nation and the users of the facilities in the right of way, i.e., Desert Rock, in the event that any of the lands within the right of way and/or the improvements in that right of way are ever condemned or taken by the United States,” Plagens said.

“Eminent domain is kind of tricky when you talk about it on the Navajo Nation. I’m not a Navajo lawyer — I’ve just been around the block. The Navajo Nation owns the land.

In essence, the people that have a right to use the land don’t own it. It’s their customary use area. So the Navajo Nation isn’t taking their land; they can still use it.”

He said its up to the Land Department to make sure people can still use their land, and if not, what needs to be done to fix that. “It’s not that the Navajo Nation or Desert Rock is taking these users’ land. We’re not. We’re just asking for a right to use that land, but in a manner that doesn’t conflict with what it’s permitted for.”

The Navajo Nation would be paid more than $11 million for the rights of way, but then would waive $7.5 million of the fees and receive $3.5 million, according to the agreement.

Plagens said there is no legislated or regulated right-of-way value for lands on the Navajo Nation. “The $11 million was an appraised value that the Minerals Department had.” They hired an outside appraiser from Albuquerque to come and value the land for the purpose of the Bureau of Indian Affairs and the Environmental Impact Statement.

“She performed an appraisal for the BIA and that appraisal was for $200 an acre, or $230,000.

“Because the right-of-way appraisal is not a legislated or regulated value, that was funds never guaranteed to the Navajo Nation. That’s just the value that the Navajo Nation places on land. The way we look at it is that we agreed to $3.5 million. That’s 15 times more than what somebody would have had to pay off the reservation. So the Navajo Nation is making 15 times more than what somebody off the reservation would have made,” he said.