Tribes putting energy into economic development

Real Estate | 5 Apr |

Many tribes are looking for ways to diversify industry in their Nations or Communities. Knowing that the cost of utilities can be a deciding factor in business attraction efforts, some tribes have taken the innovative step of forming their own electrical, water, and/or telecom/broadband utilities.

Building utility infrastructure takes substantial capital investment and staff responsibility. While some tribes may choose to build some of their own infrastructure, others will negotiate a percent ownership in existing facilities, or in the case of electric utilities, purchase power from a third party. The latter two of these options enables small utility authorities to avoid the need to hire and maintain a large skilled staff and preserve precious capital for other needs.

Aside from determining the tribe’s appetite for the necessary capital expenditures, small utility authorities as well as tribal leadership must be clear about their goals. Some of the considerations  for utility formation include an ability to assert more local control over utility operations; to establish more favorable rates and policies; to improve the quality and reliability of the service; to foster more agile and responsive customer service; to serve more remote parts of their reservation; to be able to participate in energy and utility industry circles; and to create jobs for tribal members.  Certainly, this path is not for the industry dabbler, but with experts with in-depth industry knowledge at the helm backed by strong tribal leadership support, the result can be greater reliability and lower rates for its customers. 

This is certainly true in the Ak-Chin Indian Community.  Ak-Chin developed long-range goals for economic growth and development.  As a result of its long-range planning, the Community formed its own electric utility-Ak-Chin Energy Services (ACES) in 1996. In addition, it developed a state-of-the-art water reclamation facility and surface water plant in 2012. Being able to take control of these assets enables Ak-Chin not only to ensure its own self-governance and sustainability as a Community, but also to deliver value to its commercial and industrial enterprises.

At Ak-Chin’s industrial park, Santa Cruz Commerce Center, Rockstar Arizona owner and Mesquite Building tenant, Beth Mundell is effusive about Ak-Chin’s electrical service. “We love ACES!” Mundell said, “I pay lower rates at my business than I do at my home in Maricopa!”

One of the advantages to electrical utility users who locate in Santa Cruz Commerce Center is that there are no taxes and adders on utilities. Though Ak-Chin’s base rates may seem only slightly lower, these additional costs can add up to a much heftier utility bill off-Reservation.

For tribes and businesses alike, tribal utilities can be a differentiating location factor because they have a shared goal in helping business succeed. That makes choosing to develop a project on tribal land well worth the energy.

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