**Testimony of**

**Valerie Welsh-Tahbo**

**Secretary, Tribal Council**

**Colorado River Indian Tribes**

**Before the House Committee on Natural Resources**

**on Section 2 of H.R. 5680 (Grijalva)**

**April 9, 2008**

I. [Summary]{.underline}

The Colorado River Indian Tribes (\"CRIT\") appreciates the opportunity
to testify in favor of Section 2 of H.R. 5680 (Grijalva) (a Bill to
Amend Certain Laws Relating to Native Americans). CRIT would also like
to thank Congressman Grijalva for his sponsorship of H.R. 5680 and for
his support for CRIT\'s effort to achieve greater energy independence.
Enacting Section 2 of this bill provides essential support for making
the Federal policy of tribal energy self-determination a reality on
CRIT\'s Reservation. CRIT would like to propose some amendments to this
provision to avoid unnecessary delays in implementing the new law.
Before addressing these amendments, it may be helpful to summarize
CRIT\'s proposal and to provide some background information.

II\. [Summary of CRIT\'s Proposal]{.underline}

Federal law strongly encourages Indian tribes to develop their
respective energy resources. The *Energy Policy Act of 2005* (\"2005
Energy Act\") provides the regulatory and policy framework for tribal
energy self-determination. To date, however, Congress has not
appropriated the necessary resources for Indian tribes to realize this
new law\'s intended benefits. For example, Title V of the 2005 Energy
Act authorizes Tribes to create Tribal Energy Resource Agreements
(\"TERA\"). But developing and obtaining Federal approval for a TERA is
likely to cost hundreds of thousands of dollars. In addition, the 2005
Energy Act requires an Indian tribe to demonstrate the institutional
capacity to *implement* a TERA before the Secretary can approve the
TERA.

CRIT has identified an appropriate funding source to establish the
capacity CRIT needs to implement the 2005 Energy Act. Under Federal law,
the revenue derived from operating the BIA\'s power system is held in a
special account under 25 U.S.C. § 385c. This revenue may only be
expended for the project where it was generated. The law already
authorizes the Bureau of Indian Affairs (\"BIA\") to expend these power
proceeds and the related investment income on a \"revolving fund\" basis
for the BIA\'s power system at CRIT. CRIT seeks legislation providing
that the Secretary of Interior may disburse some of these proceeds
directly to CRIT for the purpose of developing CRIT\'s institutional,
managerial, and technical capacity envisioned by the 2005 Energy Act.

III\. [Background]{.underline}

The BIA\'s management of the funds collected from the BIA power system
at CRIT (and on other Indian irrigation and power projects) is dictated
by laws enacted in 1946, 1951, and 1983.

In 1946 Congress granted \"permanent appropriations\" status to allow
ongoing disbursements of Indian electrical power accounts proceeds on a
revolving fund basis \"in connection with the respective projects from
which such revenues are derived,\" for the following four purposes: (1)
payment of the expenses of operating and maintaining the power system;
(2) creation and maintenance of reserve funds to be available for making
repairs and replacements to the power system; (3) amortization of power
system construction costs; and (4) payment of other expenses and
obligations chargeable to power revenues to the extent required or
permitted by law. The BIA has indicated, and CRIT agrees, that the last
two purposes are not applicable to the CRIT power system.

The Fiscal Year 1952 Appropriations Act further clarified the BIA\'s
authority to expend revenue from these special power accounts, such as
CRIT\'s.

> There is hereby appropriated . . . the amount of power revenues
> covered into the Treasury during the current and each succeeding year
> to the credit of each of the \[Indian\] power projects . . . to remain
> available until expended for the purposes authorized by \[the 1946
> Act\] . . . in connection with the respective projects from which such
> revenues are derived.

The BIA\'s authority to expend these Indian power revenues for the four
authorized purposes is not dependent on annual appropriations
legislation. Nevertheless, Congress may authorize the use of these funds
for other purposes, at least in instances where the relevant tribal
beneficiary grants its consent. In response to a critical need for
irrigation water on an Indian irrigation project in Arizona, Congress
authorized the BIA to use the funds held in a power account to purchase
irrigation water.[^1] There is also precedent for making these funds
directly available to the respective tribal beneficiary. The legislation
that conveyed the BIA's irrigation project to the Salt River
Pima-Maricopa Indian Community (\"Community\"), included a provision
allowing the Community to collect and disburse the fees collected
pursuant to the 1946 Act.[^2]

The *Fiscal Year 1984 Interior Appropriations Act*, Public Law 98-146
(\"1984 Appropriations Act\"), provides for the BIA to invest Indian
power accounts and to apply the investment proceeds for use in
connection with the project where the funds were collected. In
particular, this law provides for the use of these interest accruals to
cover operation and maintenance expenses on the power system where the
funds were collected. CRIT believes that is also appropriate to make
these investment proceeds immediately available to allow CRIT to address
its energy development opportunities.

Several years ago CRIT insisted that the BIA evaluate and update its
electrical rate structure to ensure that the project would generate a
sufficient annual surplus to capitalize the power system\'s critical
infrastructure needs. The BIA reports that the current balance of the
power fund is approximately \$11 million. As a result of CRIT\'s effort,
the fund\'s annual growth is approximately \$1.5 million. Based on the
information available to CRIT, this appears to constitute an appropriate
level of growth, even taking into account the direct disbursement to
CRIT. In fact, after factoring in the investment proceeds that accrue to
this fund pursuant to the 1984 Appropriations Act, it is clear that an
annual disbursement to CRIT of \$350,000 is appropriate. CRIT urges the
Committee to amend H.R. 5680 to authorize the immediate disbursement of
this amount. In CRIT's view, the best way to "invest" the power fund is
to ensure that CRIT has the technical and managerial expertise to help
develop and use its significant energy resources. In addition, there is
no reason to limit CRIT\'s access to this fund to this annual
disbursement. There are other policies and programs established by the
2005 Energy Act that might also be funded from the power fund. CRIT
encourages the Committee to amend Section 2 to allow greater flexibility
to direct the funds proceeds for purposes that are otherwise authorized
by the 2005 Energy Act.

CRIT has significant, but unrealized potential for energy development.
CRIT has a sizable amount of undeveloped land in both Arizona and
California, and --perhaps most important- our Reservation is
strategically located at the cross-road of several major interstate
energy transmission corridors for both electricity and natural gas and
in a high solar radiation belt. (Solar energy production on our
Reservation is without question a year-round proposition.) These major
resources invite major CRIT electric energy developments, including
renewable solar and other forms of renewable electricity generation, as
well as more conventional thermal and pumped storage installations.
Opportunities also exist for alternate fuels, namely biofuel and
compressed natural gas production. Moreover, CRIT and its members can
save money and energy by learning and adopting proven energy efficiency
practices. The only thing missing is the funding that CRIT needs to
develop a TERA and to establish the administrative and regulatory
structure that Congress envisioned when it passed the 2005 Energy Act.
Enacting Section 2 of H.R. 5680 is an essential step in making this
shared Federal-Tribal vision of an energy future a reality.

With a few changes to Section 2 of H.R. 5680, CRIT is ready to hit the
ground running and serve as a flagship effort to implement the 2005
Energy Act. CRIT is hopeful that its effort to implement the 2005 Energy
Act and achieve energy self-determination will provide other Indian
tribes will valuable insights and ideas for use on their reservations.

Once again we would like to thank Chairman Rahall for holding this
hearing and Congressman Grijalva for his leadership in introducing this
legislation.

\# 5249542_v1

[^1]: Public Law 101-301, section 13 (1990).

[^2]: Public Law 106-568, section 102(a) (2001).