Navajo corporation to control energy resources

The Navajo nation is setting up a tribal corporation to control the development and distribution of its extensive energy resources -- its own version of the Tennessee Valley Authority.

The idea is to gain greater energy and economic independence. At least four other Western tribes are following in the Navajo's footsteps.

The inspiration for the Navajo Energy Development Authority (NEDA) came from problems the tribe encountered in getting more electricity, says Ahmed Kooros of the Council of Energy Resource Tribes. Mr. Kooros was Iran's deputy minister for finance and oil under the late Shah and has been working with the tribes in the development of the substantial energy resources on the nation's reservations. According to US government estimates, at least 12 percent of coal reserves, 3 percent of oil and gas, and 15 percent of uranium are located on Indian land.

In the past, Indian mineral resources have been developed by outside corporations under lease arrangements where the tribe gets a fixed royalty and has little say on how the minerals are extracted.

As the value of their resources and Indian activism have increased, the tribes have become increasingly dissatisfied with the traditional lease approach. They feel that many past contracts allow companies to pay extremely low royalties.

The situation that spawned NEDA illustrates some of the causes of Indian dissatisfaction with past practices. The Navajo reservation, located in an area of northeastern Arizona, nortwestern New Mexico, and southern Utah, is the site of a large coal mine, operated by Peabody, which supplies the Four Corners power plant, also on the reservation.

According to Kooros, the Navajos had an agreement with Four Corners to supply the reservation with electricity. The Navajos came to the point where they needed more kilowatts but couldn't get the power plant on their own land to supply it.

"The Navajos began asking, 'Why don't we have our own coal mine? Why don't we have our own power plant? Why don't we have our own utility?'" Kooros explains.

The result was a Navajo energy policy approved several months ago that calls for greater self-sufficiency and approves the establishment of NEDA

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