Hard-Luck Tribe Pins Its Hopes on a Power Plant

Tribal Chairwoman Mary Belardo gazes out over the windblown 40-acre piece of desert in the Coachella Valley, lays out the grandiose plans for the site and intones: “This is our chance at economic gains. Our biggest one by far.”

She proceeds to talk up not a casino, hotel or retail strip center--all developments common to Indian reservations but unfeasible in this desolate corner of east Riverside County. No, what Belardo envisions here is a massive electric power plant that could bring a windfall of $1 million a year to her Torres Martinez Band of Desert Cahuilla Indians.

Undesirable to most Californians, who consider power plants air-polluting eyesores that ruin neighborhoods, electricity projects are being built or sought by a half-dozen Indian communities in Riverside County, Arizona, Nevada and Oregon.

They see them as economic safety nets suited to remote reservation lands and a means of reducing their communities’ reliance on politically sensitive casinos.

Among the poorest of the state’s 100 Indian bands, the Torres Martinezes have no casino because their reservation is too far from traffic.

The 650-member band is also one of the unluckiest: Half their land lies beneath the Salton Sea, which was created by a Colorado River flood in 1905. Three-quarters of a century later, they are still waiting for reparations from the federal government and the local water district.

“We say go for it,” Belardo said of the $275-million natural gas-fueled power project that Calpine Corp. of San Jose proposes to build on 40 acres it would lease from the band.

The project, which would start construction in the spring with a completion date of late 2003, would seem a winner all the way around.

Calpine stands to add $30 million a year in revenue and consolidate its position as the top developer of new power plants in the highly competitive California wholesale power market.

The state would gain a project that could deliver 650 megawatts--1.3% of the electricity it needs on a hot summer day--and slake some of its chronic thirst for more energy.

And few would begrudge the Torres Martinez band a chance to make something of otherwise economically marginal land.

Despite Tax Breaks, It’s a Challenge

Unlike gaming, a controversial activity that can bring political interference from the “uplifters,” as H.L. Mencken described them, power generation “has brought a renewed respect from the local community,” said Nora Helton, tribal chairwoman of the Fort Mojave Indians, who are “hosting” a Calpine plant now under construction in Bullhead City, Ariz.

The federal government is encouraging reservation power plant developers such as Calpine with tax breaks. Such incentives and the reduced red tape that accrue to projects built on “sovereign” Indian ground are what attracted Calpine to sign a deal with the Torres Martinezes last year.

But for all the seeming benefits, the would-be partners are learning that building a power plant, even on Indian land, is about as easy as a space launch, even when its completion would seem to serve so many needs.

Calpine and the Torres Martinezes have run into a host of legal, physical and financial obstacles, arising in part because they are setting a precedent: Theirs would be the first major, modern power plant built on a California reservation.

The biggest stumbling block has been jurisdictional: Which level of government, state or federal, should license the project?

The Torres Martinezes say that as a sovereign nation, they answer only to the federal government and that the Bureau of Indian Affairs should manage the process.

That’s what Calpine was banking on coming into the project, because that would shave at least six months off the processing time.

Federal permitting is imperative for the project to succeed financially, said Calpine project manager Ralph Hollenbacher, because state review would delay its opening past the 2003 deadline for the tax incentives.

While sympathetic to the Indians and cognizant that the state desperately needs more power, the California Energy Commission, which licenses all power plants on state land, believes California retains licensing authority over projects on Indian reservations--especially, as in this case, when the project must connect to transmission and natural gas lines outside the reservation.

Calpine’s Fort Mojave project in northwestern Arizona, which will begin supplying electricity to Phoenix and Southern California next year, breezed through the permitting process in 12 months. But all improvements--the plant, transmission lines and a gas main--were on either Indian or federal lands. Arizona had only limited say over the process.

California’s principal interest is seeing that all power plants observe the state’s stringent air-quality standards--as Calpine has pledged to do--and that it maintain authority over permitting “linear” projects such as the gas and transmission lines that the plant will access.

“I hesitate to call it a dispute at this point. California needs power so we are not anxious to try and mess up their plans here,” said energy commission general counsel Bill Chamberlain. “At the same time, if we don’t make it an issue, someone else might. Someone with land nearby could attempt to litigate whether the plant could go forward.”

A painful irony for the Torres Martinezes, given the 1905 flood that has defined their misfortune, is that getting adequate water for the power project has become an item of dispute.

The Indians and Calpine assumed they could simply sink a well because the band was granted senior water rights, meaning their claims supersede all others, in the 1800s. Selling well water to Calpine would also mean millions more in yearly revenues to the band.

But the Torres Martinezes have never meaningfully used or adjudicated their water rights. And it is now questionable whether they could pump the 4,000 acre-feet a year the plant needs to operate--four times that used by a typical desert golf course--without drawing a legal or environmental challenge.

“The aquifer is in substantial overdraft” and in decline, said Tom Levy, general manager of the Coachella Valley Water District, adding that his advice is to use Colorado River water that flows into the valley by canal near the plant site. “We will be able to find them some source of water that meets their needs and is environmentally sound,” Levy said.

Adding to the uncertainty is a new competitive factor: The Torres Martinezes’ well-to-do neighbor--the Cabazon Band of Mission Indians, which operates the lucrative Fantasy Springs Casino on Interstate 10 near Indio--wants to build a power plant a mile from the Calpine site, posing a possible competitor for limited water and electricity transmission capacity.

The Cabazons are in talks with Southern Co. of Atlanta to be partners on a power project, said Patrick Schoonover, tribal legal affairs director.

Although he denied that there is any race between the two Indian groups, he acknowledged that transmission capacity--that is, sufficient room on high-tension wires leading from the Coachella Valley to consumers--is at a premium.

“I anticipate our negotiations will go well with Southern, although we haven’t concluded a deal and we have not made a formal announcement,” said Schoonover, who is based in Indio.

“There is sufficient need for power in the state to develop several sites. And there will probably be several sites [in eastern Riverside County] in the near future.”

Plant Could Be Key to the Future

Given their hard-luck history, the Torres Martinezes can be forgiven for fearing that their project could lose out. Their attempts to develop their 12,000 remaining acres have failed, both because the land is unforgiving and because they are so broke that they can’t afford to dig wells that would open their holdings to grape and date farming.

But a power plant could turn their luck around. The $1 million in annual lease payments that Calpine would pay would be enough to fund other projects, such as farming, apartments, a truck stop or eco-tourism built around the unique Salton Sea environment.

“Currently, we have no economic development,” Belardo said. “I only know the tribe wants to do something with its land. We see it as exercising our sovereignty.”

Hollenbacher says it’s not so simple. All of the issues--government jurisdiction, water rights, transmission capacity--must be resolved by Dec. 1, he says, or Calpine may withdraw.

“I never dreamed this project would be so exceedingly complicated,” he said. “There are several major issues out there unresolved, including some deal killers. It’s certainly not clear in my mind that we can build it.”