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North Dakota regulators bow out of tribal electric dispute

BISMARCK (AP) -- North Dakota regulators concluded Thursday that they lack authority to intervene in a dispute about which of two utilities will supply electricity to a tribal casino on the Turtle Mountain Indian Reservation.

The Public Service Commission's decision may have broader impact on the state's four other American Indian reservations, the commissioners said. All have tribal casinos and other tribally-owned businesses.

The decision allows Fergus Falls, Minn.-based Otter Tail Power Co. to build the needed electric supply network to serve the Turtle Mountain tribe's Sky Dancer casino and hotel, even though the North Central Electric Cooperative already provides power to the casino. The cooperative is based in Bottineau.

Commission chairman Tony Clark said the Turtle Mountain tribe's governing council has the power to choose which utility will provide electricity to a tribal business located on tribally-owned land.

Normally, the PSC has authority to stop construction of duplicative electric networks, to prevent wasteful spending and an unnecessary burden on utility ratepayers. However, the tribal council's sovereign authority over reservation land trumps the commission's regulatory jurisdiction, Clark said.

The council was within its rights, Clark said, but he added that the situation could result in a "poor public policy outcome."

"As a general rule, do we want, in North Dakota, double sets of lines running to businesses (and) utilities overbuilding each other?" Clark asked. "There cannot only be wasteful duplication of service, but there can really be utility shopping, in a way that doesn't take place ... anywhere else in the country."

Even in deregulated states where electric customers can choose from among power providers, those utilities do not have permission to duplicate each other's energy supply networks, Clark said.

Debra Hoffarth, a Minot attorney for the Bottineau utility, said she would discuss with cooperative officials whether they wanted to appeal the PSC's decision. Commissioner Kevin Cramer said he anticipated an appeal.

Otter Tail spokeswoman Stephanie Hoff said the utility expects to become the casino complex's electric supplier next week. The tribe has signed a 10-year contract, and it is not being given a special rate, she said.

Otter Tail already serves some large reservation customers, including the tribe's community college, while North Central has been the casino's electric provider since it was built.

Otter Tail serves Jamestown, Wahpeton, Devils Lake and a number of rural communities in eastern North Dakota. North Central serves five counties in north-central North Dakota, including Rolette County, where the Turtle Mountain Band of Chippewa reservation is located.

The commission's ruling Thursday was limited to the Otter Tail-North Central dispute, Clark said. However, its logic could apply to any tribal business located on property owned by the tribe, such as a proposed oil refinery that the Three Affiliated Tribes is planning to build near Makoti, about 30 miles southwest of Minot.

The refinery, if constructed, would be a major electric customer. It is designed to process western North Dakota crude into gasoline, diesel fuel and propane.

The Otter Tail-North Central argument arose because the Turtle Mountain tribe is expanding its Sky Dancer casino and hotel, adding about 100 motel rooms, space for about 200 additional slot machines and a recreational vehicle park.

The project is adding new casino space and converting the existing casino into a restaurant and convention hall. Its grand opening is scheduled for November. The complex is located about four miles west of Belcourt.