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South Dakota Sioux Tribe Rides The Wind

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  • RemyC
    From: http://www.fortune.com/fortune/smallbusiness/articles/0,15114,1018740,00.html via: asktheroad@ yahoo.com Turning Point A South Dakota tribe s utility
    Message 1 of 1 , Feb 24, 2005
      From:
      http://www.fortune.com/fortune/smallbusiness/articles/0,15114,1018740,00.html
      via: asktheroad@ yahoo.com

      Turning Point
      A South Dakota tribe's utility rides the wind to a brighter and cleaner
      future.
      By Carlye Adler

      Sioux official Tony Rogers
      (Photo: Ray Ng)

      Tony Rogers is a member of the rose-bud Sioux tribe who lives on the tribe's
      South Dakota reservation. He doesn't have an engineering degree, hasn't
      worked for a power station, and has never invested in the energy markets.
      Yet Rogers is an entrepreneur at the cutting edge of green energy
      development. He is director of the Rosebud Sioux Tribe Utility
      Commission-the group responsible for building the first wind turbine on a
      Native American reservation.

      Rogers's reservation, located in Rosebud, S.D., is dependent on electricity
      from Basin Electric Power Cooperative, a Midwestern utility that generates
      most of its power from coal. Basin produces more carbon dioxide per
      megawatt-hour than any other utility in the country, according to a recent
      report by a national coalition of environmental groups. At the same time,
      the Great Plains states have enough wind to generate roughly 2c times the
      total electricity consumed each year in the U.S., all of it pollution-free,
      says John Dunlop of the American Wind Energy Association, based in
      Washington, D.C.

      Although wind energy is a $2-billion-a-year industry in the U.S., it
      provides less than 1% of the country's total electricity. That is about to
      increase, though. Wind is the world's fastest-growing energy technology,
      according to the U.S. Department of Energy. Thanks to plummeting costs (at
      around 4 cents a kilowatt-hour after subsidies, wind energy can be less
      expensive than that produced by some new fossil-fuel power plants),
      installed capacity increased 36% last year-enough to light the city of
      Detroit.

      The Rosebud Sioux stumbled on the idea of converting their wind into
      electricity in the mid-1980s, when they started looking for a low-cost
      energy source and discovered that the wind on their reservation could
      theoretically power one-twelfth of the U.S. "Our jaws dropped," says Robert
      Gough, secretary of the Intertribal Council on Utility Policy (ICOUP), a
      consortium of tribes in the Great Plains. "We had a tremendous resource with
      tremendous potential."

      The project took more than eight years and cost $1.2 million. "We wanted to
      show that a tribe can own something 100% and benefit from it 100%," says
      Rogers. Rosebud Sioux hired a Lakewood, Colo., company, Disgen, to install a
      750-kilowatt, 190-foot-tall wind turbine-enough to power 220 homes. Initial
      financing came from a Department of Energy grant and a loan from the U.S.
      Rural Utility Service.

      Hybrid Hope
      By creating a cheaper battery for hybrid cars, T/J Technologies hopes to put
      more of the energy-saving vehicles on the road. The Ann Arbor, Mich.,
      18-person firm is working with the Army to create a lithium-ion battery that
      will be more efficient than existing nickel-based ones. "Because of its high
      cost, the battery is the obstacle to mass commercialization of hybrid
      electric vehicles," says CEO Maria Thompson (above). T/J has procured some
      $17 million in contracts from the Army, NASA, and others. The firm is about
      two years from its goal.
      -Maggie Overfelt

      The tribal commission completed its wind turbine with the help of an an
      unusual financing mechanism known as "green tags." Under Department of
      Energy rules, the environmental benefits of electricity from renewable
      sources such as biomass, solar, and wind can be split off from the actual
      electricity and sold in the form of a renewable-energy certificate, or green
      tag. Each tag represents one mega-watt of clean energy. Much like the
      carbon-emissions credits that are becoming popular in Europe, green tags can
      be traded on the commodities market. In addition, individuals or companies
      without access to clean energy can buy green tags to offset their dirty
      energy consumption. Green tags not only help entities such as the Rosebud
      Sioux commission raise money for alternative-energy projects but can also
      have direct economic value. In the growing number of states that require
      utilities to generate a certain percentage of their electricity from
      renewable sources, for example, power companies can buy green tags to help
      meet their renewable-energy quotas.

      As construction was beginning in 2001, the commission teamed up with
      NativeEnergy, an alternative-energy broker and marketer in Charlotte, Vt.
      NativeEnergy offered to buy up front most of the green tags that would be
      generated over the life of the Rosebud Sioux project. The company in turn
      sold the tags to a variety of green-friendly organizations, including Ben &
      Jerry's, Clif Bar, the Dave Mathews Band, and the Natural Resources Defense
      Council. Green-tag sales raised about $250,000-25% of the cost of the
      Rosebud Sioux turbine. Ben & Jerry's isn't exactly a utility, so what does
      it get out of buying green tags? Great publicity. "It solidified what our
      brand stands for and why people buy our product," says natural resources
      manager Andrea Asch. "The investment comes back fourfold in recognition."

      Today each wind-kilowatt that Rosebud Sioux sells into the local grid
      reduces Basin Electric's dirty-energy production by the same amount. Over
      the next 25 years Rosebud electricity will replace 50,000 tons of carbon
      dioxide, an amount equal to the emissions from 8,300 cars over the same
      period. The tribe hopes that the turbine will also generate revenue and jobs
      for the reservation, where unemployment is running at 82%, according to
      tribal estimates. Since the turbine's 150-foot blades started spinning last
      March, the tribe has inked an agreement to sell some of its power to a local
      Air Force base. And that's just the beginning.

      The Rosebud Sioux commission is now planning a 30-megawatt wind farm with 18
      wind turbines that is expected to go online next January. "Our goal is to
      become a service provider for this area and cities that are farther away,"
      says Rogers. He sees energy as a better alternative to the reservation's
      current cash cow, its casino. "The wind farm will generate more funds, and
      wind is more reliable than people's pockets," he explains. "And besides,
      it's cleaner money."
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