Securing electrical easements on the Fort Berthold Indian Reservation has become a huge challenge amidst oil development.
McKenzie Electric Cooperative, a rural co-op headquartered in Watford City, N.D., must treat all of its customers the same, but the Mandan, Hidatsa, Arikara, MHA Nation, is making certain demands that the electric co-op says impede construction.
“Until the Bakken boom, things on the reservation were fairly quiet and getting easements was fairly simple,” said John Skurupey, manager of the electric co-op. “It was somewhat of a good ol’ boys system over there.”
Right-of-way price increased
But then Bakken development emerged. Skurupey told Petroleum News Bakken it seemed the tribe saw opportunities to increase revenue and things started to change. In the most current MHA Nation resolution dated July 11, 2013, the standard minimum rate for issuing easements is $2,000 per acre, up from $1,500 per acre in 2011.
“This reared its ugly head the first time the tribe passed a resolution on the right of way,” Skurupey said. “We stopped constructing because we couldn’t pay the right-of-way fees. By policy we couldn’t do it.”
The electric co-op’s break from construction in 2011 lasted over a year. The MHA Nation eventually sat down with the electric co-op to review the resolution’s implications for a public utility.
“We told them if you’re a public utility offering an essential service, it should be in the best interest of the tribe and everyone to allow those entities to serve those consumers,” Skurupey explained. “They said we were absolutely right and they changed the resolution, but then changed it back later because they saw us associated with the deep pockets of the oil company. They put us back on the other playing field and we’re treated differently.”
Skurupey said, in contrast, Reservation Telephone Cooperative, RTC, does not pay for easements because “the oil companies do not need phone service, but they do need power, and the tribe is just after those dollars.” Kristin Jaeger, spokeswoman for RTC told Petroleum News Bakken her company did not want to comment on the subject.
Tex Lone Bear, director of easements for MHA Nation, says all residences are currently served with single-phase power lines, and they don’t need the commercial three-phase power that oil producers want.
“If they don’t want to pay, then we’re fine with single-phase. The landowners and homeowners are still getting electricity, but if they want to increase it to three-phase, then they need to pay the landowner what they want,” Lone Bear told Petroleum News Bakken.
Lone Bear compared the tribe’s pricing resolution to the electric co-op’s price limit policy.
“It’s the same thing here,” he said. “Our government agency establishes the rate on tribal land within the reservation boundary and you have to abide by it, or you don’t come in.”
Skurupey said the process with the tribe is not how the electric co-op traditionally does business.
“It’s a difficult situation for us, because we care. In this situation, that’s a negative for us,” Skurupey said. “We care that not only the farmer/rancher gets power to his water well, but we also care that the producer gets their power when they need it, but it’s just not happening.”
The red tape is thick
The electric co-op has tried repeatedly to obtain easements, and it currently has a 30-mile line project with more than $400,000 in easement acquisition costs, but not a single signed easement agreement. The co-op board wants the issue corrected before it proceeds any further, but the tribe insists all easements be assigned to it so it can, in turn, make an agreement with the co-op to use the easements.
“That’s not an easement in our book,” Skurupey said. “We need certainty in our business, and just having an agreement is by far not a certainty.”
Claryca Mandan, natural resources administrator for the MHA Nation, told Petroleum News Bakken she believes the oil companies have been obtaining the easements in their name and then assigning them to the electric co-op, and she doesn’t see why the tribe couldn’t do the same.
Co-op throws up its hands
The electric co-op has told its members that if they want power to their water well, home, or oil well, they must secure the easements with the tribe in the name of the co-op, providing all necessary documentation.
“Only when you hand in everything to us in a nice, neat package that keeps us out of federal prison, only then will we construct,” Skurupey said.
Oil producers have requested a large electrical capacity project on the reservation, and they’ve told Skurupey if they can’t have power within five years, than it isn’t worth trying.
“Then in all those remote areas where producers would have paid for the line extensions and the tribal members could attach to those lines and get power relatively cheap, that opportunity is going to disappear,” Skurupey said.
The electric co-op has reached a breaking point, he said, but it keeps getting the cold shoulder from the tribe.
“We’ve been trying to get a meeting with the tribe for a month now, but we get pushed to voice mail, they’re not returning calls,” Skurupey said.
