Native American Groups and Corporations Discuss Common Concerns Over Coming Energy Deregulation.

SAN FRANCISCO--(BUSINESS WIRE)--April 12, 1996--The deregulation of utilities will create sweeping changes in the way utilities procure energy in the very near future.

The impending creation of an open market will have an enormous impact on the cost of electricity for the consumer, and on energy suppliers, whether they be coal, natural gas, hydro or nuclear power generators. For energy producers the market will become leaner and more competitive.

The changing energy market -- and the challenges it presents to Indian tribes and their partnerships with energy producers -- was the subject of a day-long Energy Forum co-sponsored by BHP Minerals and the Council of Energy Resource Tribes (CERT), a coalition of 57 Indian Nations from the United States and Canada.

David Lester, CERT's Executive Director since 1983, explained that when the coalition was created in response to the energy crisis of the 1970s, "it was the first time in history that tribes participated in the development of energy resources on tribal land."

Since then CERT has become an invaluable resource to Native American groups seeking ways to participate in marketing the resources on their lands. About 3% of available energy resources in the United States are located on Indian-owned land, but only one-third of this vast wealth is being exploited.

Nevertheless, as the Navajo Nation's President, Albert Hale, told forum participants, "energy production is a substantial source of tribal revenue." In 1995 the Navajo Nation earned over 75% of its taxation and royalty revenue from the coal and utility industry -- $20 million in royalty income from BHP alone. In addition, around 75% of BHP's employees at three mines on Navajo land in New Mexico are members of the Navajo Nation.

Representatives from the California Public Utilities Commission, PG&E, Southern California Edison, Arizona Public Service, and Public Service Company of New Mexico explained that deregulation of utilities will drive down the price of electricity, putting pressure on suppliers of fuels used in power-generation.

With utility deregulation starting in 1998 in California, the market for coal and other energy resources will change dramatically. The goal of CERT's member tribes is to attain as much ownership and control of their resources in the impending free market as possible.

An attractive model for attaining Indian ownership of energy resources was described by Robert Santistevan, Director of the Energy Resources Division of the Southern Ute Indian Tribe. The Southern Ute have gradually gained close to full ownership of all the natural gas facilities and mining operations on their land in New Mexico, thereby quadrupling the tribe's income in just a few years.

Lisa Wayne of the Dine Power Authority (DPA) pointed out the irony of Indian nations having learned how to market their resources and deriving significant tribal income from energy exported from their land, while many Indians on the same reservations still live in houses without electricity or gas. One of CERT's goals is help tribes achieve energy self-sufficiency by allocating income from energy to building up the infrastructure on reservations.

The most important tribal resource of every Indian nation is its youth, and CERT's Comprehensive Education Program was the focus of the American Spirit Award Dinner following the Energy Forum. The dinner, the largest Indian education fund-raiser in the United States, was hosted this year by BHP Minerals, and brought together 43 organizations to raise over $500,000 for the Comprehensive Education Program.

CERT provides assistance to college-bound Indian high school students, and offers scholarships and internships to those already attending college.

Benny Shendo was helped by CERT when he was a student at the University of New Mexico. Today he is Assistant Dean of Students and Director of the American Indian program at Stanford University. Four of Shendo's students at Stanford have gone through CERT programs. "CERT has had a tremendous impact on Indian students," Shendo said. "Now we see them working at Amoco, Bechtel, and BHP."

For Shendo the CERT education programs, which have assisted over 700 Indian students, have a deeper relevance than just providing skills and knowledge. "They reflect the values that the CERT membership tribes have defined for educating Indian youth. It's not just about science, it's not just about technology, it's about the cultural values -- the language and traditions and understanding that are so vital and important to the Indian community," Shendo said.

"How do you combine the Western and the Indian world view? Sometimes they clash, but at the same time, we have to walk in both worlds."

"The old way of doing business with Indian nations must end," said Navajo President Hale. "In the future our relationships must be based on mutual respect and fairness." How mining companies and the Indian Nations can restructure their working relationships in a deregulated environment will be the subject of much discussion in the future.

The Navajo Nation, Arizona Public Service, and BHP have formed a joint task force team to prepare for a contract to be negotiated by 2004. Ed Pettigrew, BHP's Navajo Mine Manager, is on the task force which will explore all possible avenues for increasing Navajo Nation revenue while reducing production cost, including the restructuring of taxes. The joint task force will seek innovative ways to tackle the challenge of shrinking revenues. "Everything is open across the board," said Pettigrew.

CONTACT: BHP Minerals, San Francisco 

Jay Rhodes, 415/774-2449