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The Minnesota Public Utility Commission said it has the authority to investigate a complaint filed by the Upper Sioux Community against a rural electric cooperative. The issues raised in the complaint will be moved to an administrative judge for a contested hearing with the aim of resolving the dispute.
Upper Sioux filed the complaint after the electric co-op threatened to turn off power to the tribe should it move ahead with plans to switch on a 2.5-megawatt solar array on the reservation.
The PUC voted unanimously to move a complaint by the tribe against Minnesota Valley Cooperative Light and Power Association to an administrative court for further investigation to uncover whether the cooperative’s intention to shut off power to the tribe is discriminatory under state law.
Matthew Haugan, attorney for Minnesota Valley, argued the board’s policies don’t allow any of the co-op's members to construct a facility which generates more than 40 kilowatts—an amount smaller than what the tribe plans to generate.
Haugan also told commissioners the tribe agreed to abide by the cooperative’s board policies when it became a member of the co-op in 1990. In making his arguments, Haugan suggested that by allowing the complaint to move forward the commission was interfering with the cooperative’s ability to set its own rates.
Commissioners batted down assertions, making clear that while the agency doesn’t set rates for the cooperatives, it does retain the authority to investigate standards and practices of the state’s member-owned cooperatives.
Leif Rasmussen, an attorney representing Upper Sioux, told regulators Upper Sioux views the ability to generate electricity as an exercise of the tribe’s sovereignty.
“From the Upper Sioux community's perspective, that's all this hearing is about,” said Rasmussen. “The tribes right to self-government and self-determination.”
Rasmussen told regulators the state’s policies, which drew geographical boundaries for electric service providers, don’t apply within the boundaries of Upper Sioux’s reservation or any tribal lands in the state.
He said the solar project is intended to offset energy consumed by the tribe’s casino and would otherwise store any excess electricity it might generate.
Haugan told regulators that if the co-op allowed the tribe to generate energy in excess of what its board polices allow, it would “result in embedded costs that have already been incurred by Minnesota Valley to be shared with other members.”
Commissioner John Tuma lit into the cooperative over its repeated assertions that the commission could not investigate its practice or that a member of the co-op could produce electricity for its own consumption.
“Do you have a patent on electricity? Do you own all electricity in your area?” said Tuma. “No, you have a duty to serve.”
Toward the end of the two-hour hearing in St. Paul on Thursday, Commissioner Audrey Partridge asked Haugen if the cooperative could wait for an investigation before disconnecting power from the tribe.
The co-op re-stated its initial threat to shut off power to the tribe, adding that it would cut power to the tribe’s casino complex and not to private homes.
In response to those statements, Patridge added a measure to the PUC’s final decision referring to the matter to the state’s attorney general office for possible legal action.
Tuma also signaled to Upper Sioux Community that the commission might also consider creating a separate service area for the tribe, a move that would allow the tribe to purchase energy from a public utility such as Xcel Energy.
“We’re open to the concept of, specifically for this tribe, a discussion of their right, a right to a service territory change pursuant to the Minnesota statutes dealing with service territory area. And so, we take that sovereignty question very seriously,” Tuma said.
Commissioner Hwikwon Ham voted to move the investigation forward but also asked the co-op to consider ways to work with the Upper Sioux community to the benefit of the cooperative. Ham told the co-op that he believes the demand for electricity to power new data centers around the state presents an economic opportunity for the cooperative.
“Everybody is scrambling to find the capacity and energy. That's why, if you are only worried about financial issues, I hope you can find a better path than going into this dispute,” said Ham. “This is your opportunity to make more money.”
The tribe’s solar array is expected to be completed by the end of summer, according to Rasmussen.
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