Attorney Nann Winter, representing the tribe, said the Jicarilla Apache Nation is fed up with the service it has been getting from its current provider, Northern Rio Arriba Electric Cooperative, which goes by the acronym NORA.
“The nation has been dealing with issues related to the service they’ve been getting for three decades. The nation has lost trust in NORA,” Winter said, adding that the reservation went dark for three days last summer.
“So what they’re doing now is taking control of their own destiny. They’ve had enough.”
Winter said the agreement with PNM requires both PNM and the tribe to construct facilities that will be interconnected and scheduled to be energized by Nov. 14, 2013.
Winter said the tribe is in the middle of constructing a 115 kilovolt distribution line between Chama and the town of Dulce, where the nation’s government offices are located. The tribe also has plans to build two substations and a switch yard, and the switch yard will be turned over to PNM as part of the agreement.
Winter said the Jicarilla Apache Nation has been trying to purchase the part of NORA’s system on tribal lands for a year and recently initiated eminent domain proceedings by filing papers in tribal court. She said action was taken after negotiations for NORA to sell the system fell through.
NORA attorney Sunny Nixon denied that NORA provided the Jicarilla Nation with poor service, but declined to comment on the litigation.
“It’s our policy not to offer comment on filed pleadings,” she said.
NORA’s attorneys responded with a motion to dismiss on Nov. 19. That same day, NORA filed a lawsuit in U.S. District Court charging that the tribal court lacks jurisdiction, that the Jicarilla Apache Nation failed to comply with arbitration proceedings set forth under the franchise agreement and was in breach of contract.
“If anything, NORA’s in breach,” Winter said. “They haven’t been able to deliver quality service for decades.”
According to Winter, the tribe notified NORA that it planned to invoke a clause in the franchise agreement that allowed it to purchase the system on tribal lands in November 2011. Early this year, the tribe offered to buy the system for about $3.5 million, she said, and NORA made a counter offer of $8.1 million in May. Winter said the two sides met regularly to negotiate a deal and thought they had one until NORA nixed the sale.
“What we were led to believe was that they had reached a gentlemen’s on $6.5 million, but NORA said they couldn’t close on the deal because (the system) hadn’t been appraised,” Winter said. “I find it unfathomable that they could negotiate for six months, with offers and counteroffers flying back and forth, and then at the end of the deal say we can’t close on this because it hasn’t been appraised.
“How could they negotiate and not have a sense of the value? You don’t enter so-called good faith negotiations and not have any idea of the value of what you’re selling.”
Winter said only after it became clear there wouldn’t be a deal did she file imminent domain proceedings.
The attorney said filing in tribal court is the correct venue.
“The Jicarilla Apache Nation is a sovereign nation,” she said, adding that it’s imminent domain code is identical to that of the state of New Mexico. “It’s an active judiciary and legal system.”
Winter said imminent domain laws would allow the tribe to acquire the part of the system on tribal land at fair market value.
NORA reported the net value of its utility plant — including poles, lines and equipment located off tribal land — at $9.2 million in 2011, according to the USDA Rural Utilities Service, which has approved loans to NORA totaling $17.5 million.
While she declined to talk about the lawsuit, Nixon, NORA’s attorney, denied Winter’s contention that the co-op provided the tribe with poor service, backed out of an agreement to sell the system and that tribal court was the proper venue. She noted that NORA has asked for arbitration under the terms of the franchise agreement.
NORA is one of two member-owned rural electric cooperatives serving the Jicarilla Apache reservation. Jemez Mountain Electric provides electricity to the southern end, while NORA serves the more populated northern part.
NORA has been providing energy to the reservation since 1986. The amended franchise agreement is due to expire June. 30, 2014.
If NORA were to lose tribal members as customers, it could have a significant impact on the co-op. It’s already one of the smallest rural electric co-ops operating in the state, with 4,361 customers and 544 miles of distribution line.
Winter said 48 percent of NORA’s total load flows to the reservation, which has a population of 3,250 people, according to the 2010 Census. It’s unclear how many tribal members are also NORA customers.
In recent years, the Jicarilla Apache Nation has taken steps to become more self-sufficient. It already has water and natural gas utilities. The Jicarilla Apache Nation Utility Authority was formed in 2004 and reported annual earnings of $320,000 last year, according to Dun and Bradstreet.