Warm Springs, Ore. — A $30 million hyroelectric power plant under construction on the Deschutes River here will be the first federally licensed power project on an Indian reservation anywhere in the country. Beginning in July 1982, the plant will produce as much as 120 million kilowatt- hours of electricity each year for sale by the Confederated Tribes of Warm Springs.
The plant is the latest in a series of economic moves since 1958 that have led to today's financial well-being of the Confederated Tribes -- Paiute, Warm Springs, and Wasco Indians -- numbering about 2,100, who make their homes on the 640,000-acre reservation in north-central Oregon.
Funds for construction of the plant include a tribal appropriation of $10 million, a low- interest federal loan of $5 million, and a State of Oregon loan of $15 million.
In terms of tribal income the hydroelectric plant will probably rank as the biggest revenue producer. It is anticipated that over the expected 20-year life of the plant, net income to the tribes will be at least $4 million a year, a figure that would increase in any year in which an increase in the river flow boosts electricity production.
Power output at the plant will range between 80 million and 120 million kwh. a year. Overall, net income to the tribes may run between $80 million and $100 million for the 20- year plant life span.
Tribal chairman Delbert Frank said that the start of construction in april "realized our dreams for this project" and that it will benefit our tribal members and all the citizens of Oregon by producing needed energy.
Electricity is to be sold, on a long-term contract, to Pacific Power & Light Company (Portland, Ore.). The agreement is one in a series negotiated between the utility and small-scale power producers using such renewable resources as water and wind power.
A spokesman for Pacific Power explained that annual revenues to the tribes will not only reflect the effect on power production of any increases in available water flow, but also any upward changes in the rate paid for the power.
The first step toward tribal economic independence here was taken in 1938 when the confederation opted for self-government under the indian Reorganization Act of 1934. But it was the decision in 1958 to use solely for tribal development $4 million in federal compensation for the loss of ancient tribal fishing rights on the Columbia River that started the tribes toward today's financial standing.
Kenneth L. Smith, a member of the Wasco tribe and general manager of the confederation until his recent appointment as assistant secretary of the interior for Indian affairs, has said that the 1958 decision "paid off in jobs and income for tribal members" through new income-producing activities.
Today, the Confederated Tribes own and operate a vacation-convention resort, a profitable forest products company, and an assembly plant that has been a subcontractor since 1968 to such nationally known firms as Boeing Aircraft and Tektronix Inc., the latter a leader in the electronics field.
The confederation is also the beneficiary of a new $7.5 million fish hatchery on the reservation built and operated by the federal government on the Wasco River. The hatchery directly improves the tribal catch of salmon and steelhead each year, while also contributing to restoration of runs in the Columbia River.
When first opened in 1972, the resort, Kah- Nee-Ta Lodge, was a 90-room structure which was later expanded with a 55-room addition. Initial construction and the expansion cost some $8.5 million, and a room and facility renovation program is being carried out which will cost $1.5 million more.
Another current major tribal project is the laying down of a water system, to provide adequate water for expanded home building, at a cost of some $8 million. Such work as this is done largely by outside contractors. But in every tribal activity the effort is made to hire tribal members.
Jobs for tribal members run to around 900, and today, just as in past years, the problem is finding tribal workers. This reflects the fact that the confederation is small, with many young people not yet entering the work force.
All this tribal activity is directed now from a new $1.5 million, 26,000 -square-foot tribal headquarters where overall supervision is exercised, since the appointment of Mr. Smith to the Reagan administration post, by tribal chairman Delbert Frank.
The 45-year-old Smith had worked for the confederation since 1959 and had held the post of general manager for the last 10 years. He is the first person chosen to head the federal government's Indian programs who brings to the job a strong background in reservation programs and with a knowledge of how Washington decisions actually work at the reservation level.
One of the earliest Warm Springs residents to graduate from college, Smith has a major concern for education of Indian youth, which he has said he is "generally dissatisfied with." But he sees this as a problem that must be handled by tribal councils and parents on the many reservations.
The Warm Springs tribal report for 1980 has not yet been released. But gross revenues for last year were in the neighborhood of $49 million, a gain of $5 million, and the value of property, plant, and equipment rose to $134 million from $118 million in 1979.
Benefits to tribal members include health and social services as well as construction of necessary housing, especially for the elderly. In addition, dividends are paid annually, having risen in 1979 to a $5,594,000 total from $4, 820,000 the previous year. In 1970, dividends paid totaled $1,390,000, and indication of the economic improvement in the intervening nine years.