Marketplace - Breaking Ground: Red Lake Nation’s solar-powered future

Episode Date: June 24, 2024

Red Lake Nation’s chairman, Darrell G. Seki Sr., wants to make energy free for all his nation’s citizens. Inflation Reduction Act funding could enable that by subsidizing the installation of more solar panels throughout their northern Minnesota reservation. In this episode, “Marketplace” host Kai Ryssdal visits Red Lake and hears from residents about their solar-powered goals and how clean energy connects to cultural values around environmental stewardship.

Thank you to those who donated during our May fundraiser and to those who gave it year round. Support is still needed though to end our budget year on target. So please help power this important resource. Would you make a budget year end gift at marketplace.org slash donate? On the program today, we go north to find the sun, clean power, and our series breaking ground from American public media. This is marketplace In Los Angeles, I'm Kyle Rizdal. It is Monday today the 24th of June good as always to have you along everybody All right. This is a thing you don't usually

do in storytelling, but I'm going to spoil the ending here for you. I'm looking at a field with some trees and grass and all this jazz. Bob, what do you see? Well, what's it going to be? Yeah. Tell me what you see.

I see Red lakes future I see the future of red lake being a wholesale energy provider I see red lake citizens getting jobs I see economic development We start today with tape you're gonna hear again about the 22-minute mark because I want you to keep that imagined future in your mind. For today's installment of our series Breaking Ground, we're looking at how the Inflation Reduction Act is playing out in one particular place, the Red Lake Reservation in northern Minnesota, in complicated and invisible and even contradictory ways.

The IRA includes $720 million specifically for tribal nations and native communities, as well as a change to the tax code that makes a ton of money available to tribes for the first time. This is a story about the intersection of opportunities and obstacles that come when the federal government tries to expand its role in this economy. Are you impressed with Red Lake so far? It's something. Wish it was a little bit warmer. It's 60 degrees, cloudy, windy, rain coming any second.

Red Lake is less than 100 miles from the Canadian border. Bemidji is the closest city. The reservation is more than 800,000 acres. Around 5,500 people live there. And I'm standing with two guys in a parking lot off the main road, schools and fire department and the government center nearby. So introduce yourself, tell me who you are and what we're doing here. Yeah, Robert Blake. I am the owner of Solar Bear, tribal citizen of the Red Lake Nation. Solar Bear is the only native-owned solar developer in the state. And I'm Ralph Jacobson, I guess a veteran of the early solar movement. I started my career in solar in 1979 during the Carter years and grew a business that I sold to a utility two years ago and then I get to actually spend more time doing interesting

things like working with Bob Blake at Red Lake. Ralph works as a business consultant for Solar Bear. We met in this parking lot because this is where the path to that future, to the tape that you heard up at the top of the show, begins. This right here is the Red Lake Tribal Government Center. This is the first building that's got solar on it. And it's in the shape of an eagle, which we say McGeezy in Ojibwe. Ojibwe is the official language of Red Lake and the government center was Bob and Ralph's

first solar project together. It's a two-story building and that eagle is huge. Head coming off the top of the roof, wings spanning the length of the thing. Tell me about solar in this building and why and how it came to be. Okay, the chairman had a real vision for moving towards clean energy and early on he didn't know much about it but he really wanted the economic development to start going on during his watch. A note here about the economy at Red Lake. According to 2022 census data, less than half the people here had jobs and less than 5%

had a bachelor's degree or higher. People in Red Lake can't always pay their utility bills, which is why Ralph was brought here almost a decade ago to see if they could install solar and lower those energy costs. Is there a way we can go up on the roof and look at the panels? Can we do that? Absolutely. Yeah, we can do that.

Thanks. Hey, hey, hey. Hey, Barb, we gotta go up to the roof. Thanks, Barb. We got the right person. We just like that. Getting out of a car in the parking lot. Barb is the tribal chairman's executive assistant, We are the parking lot.

Barb is the tribal chairman's executive assistant, and we followed her into the government center, climbed a few flights of stairs, and then she helped us unlock the hatch, pulling it down from the ceiling. It's quite the hike up there. I'll go up and go down. Be careful. She wasn't kidding. It's steep.

It needs going up a ladder ladder but not by much. Yeah, alright, there you go. It's really good to get a good feel of the breeze. Do a little workout. Oh, you get the breeze off the lake. Yeah. After a rain, the lake smells great, doesn't it? Yeah.

Pretty strong wind up there. We're standing behind the eagle's head. You've got to get a picture of that. There's a view of Red Lake itself in one direction, the powwow grounds in the other. Bob put together a team of tribal members and installed the solar panels up here six years ago. It cost about $130,000 back then. Ralph Jacobson actually crowdfunded that money.

Why solar? What is it about clean energy that makes you say that's an opportunity for this tribal nation? Because a lot of our cultural teachings are rooted in environmental stewardship. A lot of our cultural teachings teach us to take care of Mother Earth. And one of the guys told me

when we were done installing this project, they said, Bob, this really feels good. If that could bring that type of pride to this one individual, what would that look like across the country, you know, in tribal country where we have the highest disparity rates among all calls on drug addiction, missing murder indigenous women. And that's when I started thinking to myself, could renewable energy help solve a human health crisis that I believe is taking place in tribal country?

Bob grew up in the Twin Cities, but he came up to Red Lake Nation all the time, spent his summers here. And his hope is that Solar Bear can be a model for other tribes and that building solar panels and the jobs and the revenue that come with it can improve their lives. We thought that it was casinos that were supposed to do this. Now, the casino industry is a billion dollar industry, okay? But the energy industry is a trillion dollar industry. And I start thinking to myself, native people, we are in the energy industry is a trillion dollar industry and I start thinking to myself native people

We are in the wrong industry keep going with the the trillion dollar industry Talk to me about the economic development benefits for the tribe If you grow your business and and the solar industry and you know Just because because if kovat taught us anything a lot of casinos were teetering on bankruptcy during kovat But here's the thing, the sun shines every day. Those are pennies dropping in the bucket, and those pennies add up. We left the roof, went back down the hatch.

I'm just going to spot you as you figure out how to do that. Radio host and three producers killed in a fall-down stairwell. No? They fell on Bob Blake, who used to be a lyingbacker, so he caught them. The future of solar at Red Lake, what comes after rooftop projects like this one, is the government in this economy. like this one is the government in this economy. The Inflation Reduction Act has an opportunity to go from crowdfunding solar panels on one government building

to the millions of government dollars that are available for a project more than 200 times bigger, utility-scale solar, 15 megawatts, that can power the entire reservation three times over. Investment of that scale comes only from federal dollars, but that opportunity always comes with obstacles. First, though, you have to get the word out that the money is there, which is where Pilar Thomas comes in. She's a lawyer at Quarles and Brady, practices in tribal energy and economic development.

I'm also a member of the Pasquoyaki tribe, which is based here in Tucson, Arizona. And I've been in Indian energy probably for about 20, almost 20 years now, both as a lawyer and worked at the Department of Energy for four years under the Obama administration in the Office of Indian Energy. I love doing my job of working with tribes and tribal enterprises and others who want to work with tribes. Pilar spent a lot of time talking about the Inflation Reduction Act, 26 USC 6417 in particular, elective payment of applicable credits. Explain that in layperson's talk, please, not lawyer talk, and why it's so important. So there's two parts to the tax code that were changed that were critical.

We'll walk you through the changes because the details here really matter. So industry, the for-profit renewable energy developers have been relying on tax credits to fund these projects since they were developed in the early aughts. Tribes have never been able to do that. I'm going to play that last bit one more time because this is where the change comes in. Tribes have never been able to do that. Tribes are non-taxable entities in the language of the Internal Revenue Service. And no taxes means no tax credits, which means tribes have basically been locked out of those

benefits. So let's imagine building a $10 million solar project with tax credits. That $10 million project would get a $3 million tax credit. Basically, it buys down the cost of the project economically. So what was a $10 million project is really now a $7 million project. Essentially, a 30% discount. So tribes were never able, because they don't get tax credits, because they don't pay taxes,

they were never able to get that economic benefit to help buy down the cost of a project. Buying down the cost of a project. Buying down the cost of a project is how things actually get built. And here is the change in the Inflation Reduction Act. Since tribes don't pay taxes, they get a direct payment instead, worth whatever the tax credit would be.

It's called direct pay. So, back to that $10 million project. So a tribe can now take the $10 million and now get a $3 million payment from Uncle Sam, from Treasury, and now again it only costs the tribe $7 million. In the past it would have cost them ten million. On top of that, the IRA also increases other tax credits available to everybody. So if you meet certain incentives, you can get up to 70% back. That now goes from a $10 million project to a three million, because Uncle Sam will write you a check for $7 million for your 70%.

So that will incentivize a lot of clean energy deployment on tribal lands. This is what government in the economy looks like, incentivizing projects that meet federal goals and that otherwise probably wouldn't get built. But getting there to those future projects is a difficult and complicated process. More on those obstacles from Red Lake Nation coming up after the break. So Here's the deal, gang.

Marketplace is for the public good, not for profit. We count on you, our listeners, to help us cover the costs of the reporting that you rely on. We are going to remain free and accessible to everybody us cover the costs of the reporting that you rely on We are going to remain free and accessible to everybody. That's part of our mission But if you're in a position to donate we are counting on you Please give what you can right now at marketplace org slash donate or click on the link in the show notes This is marketplace. I'm Kai Rizdal. We are talking today for our series Breaking Ground about how government in the economy, money flowing from the Inflation Reduction Act specifically, could affect the future

at Red Lake Nation. Whew. We're just up on the roof. It's a little chilly. Okay. Where are you from? Los Angeles, Southern California. There you have it.

So this is doing it. You know what I mean? Okay. Tell me who you are and what you do around here. Okay, my name is Joel Plummer and I serve as General Legal Counsel here for the Red Lake Band of Chippewa. How long you been doing that, Mr. Plummer?

Well, 40 years as an attorney and then about 25 off and on for Red Lake. You're busy? Kinda looks like it. Very, lots of things going. We walked into Joe's office, lights were off, super tall stacks of paper all over his desk. And one of the many things that Joe's working on is solar power. His boss, the chairman of Red Lake Nation, hopes the tribe can one day create all of its own energy.

Remember that imagined future where we started the show? I'm looking at a field with some trees and grass and all this jazz. Bob, what do you see? What, well. What's it gonna be? Yeah. Tell me what you see. I see Red Lake's future. I see the future of Red Lake being a wholesale

energy provider. I see Red Lake citizens getting jobs. I see economic development. With the IRA, the federal government has created millions of dollars worth of new opportunities to build utility-scale solar opportunities, yes yes also obstacles. I'll just speak frankly you know we're pretty let down and frustrated over all of the processes at the federal level. Say more about that. Okay well you know we started this probably six I don't know how many years ago you could ask Bob or Ralph and so we

thought that things were gonna roll you, you know, just really snowball. They haven't. You know, we've done everything that we could on our end to secure the big dollars, you know, from the feds. The tribe has gotten some federal funding the past couple of years. An IRA clean energy grant, money for EV chargers and electric school buses. But government money does not come quickly. Why do you think this is so hard? I don't know why it's so complicated.

To me it's simple. Let's just simplify it. We already did all of the engineering, soil testing, all the environmental, so we're ready to go. Last thing and I want to make sure I get the question right. There are a lot of ways that life is difficult for Red Lake Nation members and others. What would the economic benefits of being able to be energy independent do for you? Well, not only would it have the tribe producing all of the power, but there would be a large surplus that would be sold, could be sold anywhere.

Could be sold in San Francisco, a city that has renewable energy requirements. Could be sold to big pipeline companies. So you know, that that's, you know, we already have our eyes on all of this stuff. So you got plans? Yeah, we have plans. Thanks for your time, Mr. Plummer. I'll get out of your hair. Okay, good. I'll go bug the chairman for a little bit.

Do me a favor, just because it's radio. Tell me who you are and what your job is around here. My name is Darrell G. Seakey Sr. I'm the chairman of Red Lake Nation. Chairman Seakey was born in Red Lake, is a Vietnam veteran chairman since 2014. So we've been spending the morning with Bob and Ralph looking at solar panels and what they're trying to do? Okay. Why is it important for you that Red Lake Nation is energy independent? When I was out campaigning and I was going house to house, people were having trouble with electric co-op because the prices are so high and they get behind on payments and then they get disconnected. A couple of years ago Chairman Siki met with somebody who had solar panels and was making

money off that power. So that interests me in solar paneling for our reservation. So you know the vision at the time is to be energy free for Red Lake Nation for all the people. What do the people think about this? When you go out and talk to people, what do they say to you about this? When is it gonna happen?

Why has it taken so long? Cost money to put panel in, solar panel. Do you think this can work? It's gonna work what? Do you think it can work to get yourself energy independent? Yeah, if we get money. We're gonna have money to do things, right?

Nothing is free. Except maybe solar energy. Well, yeah, but you still got to pay for the panels, right? Once you get those, then it will be free. See, you're skipping that part. You keep asking me the same question, I keep telling you the same answer. What's the question I'm not asking you? What do you want to tell me that I'm not asking you?

That we're energy free. Once we get all this, I'd like to hear you say that. But we're not getting, we're not getting nowhere. Are you frustrated? Of course, everybody's frustrated. They keep calling me, what happened to the solar panel that you were campaigning about? Do you think you're gonna get there?

I don't know, ask them. They're the ones that, you know, they're the ones we hired to help us on the solar panel. I don't know what's going on. Do you have the answers? I don't. I'm gonna go talk to him now. Thanks for your time, Mr. Chairman, I appreciate it.

Yeah, thanks for asking me some questions, some questions I don't like. Thank you, sir, I really appreciate it. All right, thank you. Have a nice afternoon. Well, that's all right. All right. I don't like talking to NPR

because they always change my stories. Well, we'll send you a tape of this one. I think you're going to see it sounds pretty much the way you said it. Yeah. One reason for that frustration that maybe you can hear from Chairman Siki and him telling me to go talk to Ralph and Bob is that in 2020, the tribe bought more than 200 acres of land located near the reservation for that big 15 megawatt solar project.

It's been $700,000. But even with the land and years of planning and all the federal money that's on the table, it takes energy and time to clear the red tape to get where you're going. You want to sit in the front? Sure, I'll sit in the front. Ralph, do you want to sit behind Kyle? Do you want to put your bag in the back, Ralph?

No, it's fine. It's good. Oh yeah. I'm good right here. We took a drive out to that field with the trees, the one from the beginning of the program, the land where the big project is going to go. Hey Ralph, you're going to have to guide me to the farm. About 20 minutes out from the government center?

Well, we missed a turn. Didn't catch you fast enough. I missed that too. Well, it is a tiny little nothing turn road. I know. I keep on thinking it's right up there. I missed that. We parked on the side of that dirt road. Rain was coming down, so we got out the umbrellas.

We were looking at miles of farmland, grass and white pines. This is where that imagined future is gonna go. I'm looking at a field with some trees and grass and all this jazz. Bob, what do you see? What, wow. What's it gonna be? Tell me what you see.

Yeah, I see Red Lake's future. I see the future of Red Lake being a wholesale energy provider. I see Red Lake citizens getting jobs. I see economic development. I see Native folks that don't feel hopeless and I just feel like this hasn't moved fast enough. Like I agree with the chairman, it has been solved, but this is a big endeavor and it takes time. But I see so much good things happening for the community of Red Lake. That's what I see. The total price tag to build this thing is at least $50 million, some of which could be recouped through those Inflation Reduction Act direct payments we talked about with Pilar. Does any of this happen without the Inflation Reduction Act and the federal government?

None of this happens without the Inflation Reduction Act, period. But that doesn't mean it happens without bumps in the road. And also, Chairman Cicchi is cranky with you and you don't want that. We need to talk to Chairman Sekey more. Can I just say real quickly to everybody listening to this program, you never want your chairman cranky with you. Trust me, Bob Blake said it here first. How worried are you?

Sorry, I just have to ask this. You know, the federal government can be fickle. This is an election year. What's your frustration factor? Well, I would say it's more like fear that things are going to fall apart before we actually have the money flow into the community. And so we're aware, Bob has been made aware,

by people from the Department of Energy, from the BIA, that there's an urgency to get the money out the door before the election. But I would like to say too, now that the direct pay is here and all of the other incentives are here for the tribal nations to take advantage of, this just piles on to all the work that Ralph, myself,

and others have been doing to prepare the community for this transition. A lot of communities around the country, tribal communities in particular, they don't have that luxury. Guys, thanks a lot. I really appreciate it. Thanks for bearing with us in the rain too. Miigwetch, thank you. Ralph guesses it's going to be three more years until this land that we're looking at is cleared of trees, covered in solar panels, and generating power. This is what's happening with just one of the 574 federally recognized tribes in this country that have access to new government dollars.

Its years of work and time and investment, years of opportunities and obstacles coming from a law that in an election year faces an uncertain future. This final note on the way out, today a quick preview of the next installment of Breaking Ground, a trip to Kentucky where more than a billion dollars from the federal infrastructure law is going to be spent to connect every household in that state to high speed internet. That's a gap right now that's being filled in part by local libraries. What would these people do if you weren't here? Well, they might be hanging out at McDonald's.

We have no Starbucks, so they wouldn't be there. We're a no-Starbucks town. And I can't even imagine because the services that we provide and the way they use our computers are participating in society. And we are done for the day. Our daily production team includes Andy Corbin, Alicia Hassan, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdal. We will see you tomorrow, everybody. This is APM. ER shifts. Kai and the gang keep me awake and interested for my 30-minute drive. For someone not in the financial field, it's a fantastic synopsis of all things business and economics. I love the commitment to showcasing a steady stream of brilliant and articulate women

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