A Minnesota tribe built solar for its casino. Now its electric supplier vows to cut off power.

UPPER SIOUX COMMUNITY — A Dakota tribe in western Minnesota plans to turn on a new solar array as soon as next month to help power its casino and hotel.

But if the Upper Sioux Community follows through on that plan, the local electric provider says it will disconnect the tribe's gaming enterprise from the grid, leaving the tribe without enough energy.

The unusual conflict between Upper Sioux and Minnesota Valley Cooperative Light and Power Association has pitted assertions of tribal sovereignty against claims the project flouts state utility laws.

That debate has now landed at the Minnesota Public Utilities Commission, after the tribe asked the board of utility regulators in early May to make Minnesota Valley keep the lights on.

The long rows of solar panels are nearly complete on Upper Sioux land, which is home to about 150 people near Granite Falls. Bordering farm fields, the solar array is across the street from the tribe's casino, hotel and convention center on a bluff above the Minnesota River.

On Tuesday, three workers for the tribe's solar contractor, Wolf River Electric, pulled cables along on the panels, which were the only source of shade on-site during a searing-hot day.

Minnesota Valley, a small rural nonprofit based in Montevideo with about 5,200 customers, did not respond to requests for comment. In letters to the tribe, the cooperative argued that the size of the solar array violates the utility's policies, as well as state and federal law.

Minnesota Valley said it would be unfair to other members of the cooperative to keep serving the tribe if Upper Sioux moves ahead.

"MN Valley wants to work with Upper Sioux as it has done so since 1990," wrote attorney Matthew Haugen in December. "However, MN Valley has a duty to treat all of its members equally and not discriminate against or for any individual member."

In an interview, Upper Sioux Tribal Chair Kevin Jensvold said those laws don't apply to a reservation, and that the tribe doesn't need permission from others to build its own power supply. Jensvold said the electricity is only for use at the Prairie's Edge Casino Resort, and won't flow into Minnesota Valley's system. The solar array would provide about 30% of the energy needed to run the casino complex.

"Our opinion is that as a tribal nation with inherent sovereign rights, we don't need to engage [the cooperative] in any discussions," Jensvold said.

How the solar standstill came to be

Jensvold said the tribe has invested in renewable energy in the past, including geothermal for homes. Fossil fuels damage the planet, Jensvold said. Much of Minnesota Valley's electric supply is generated at coal and natural gas plants.

The tribe also has financial reasons for pursuing solar. Jensvold said the energy costs of its gaming enterprise has nearly tripled in the past 20 years. The casino is Minnesota Valley's second-largest customer, according to a statement submitted to mediators by the tribe's attorneys.

"It's just a way to offset some of those expected future increases to provide for tribal stability, not being subjected to outside influences out of our control," he said.

Minnesota Valley said it believed Upper Sioux could not use or sell energy from a solar array in excess of 40 kilowatts of electricity unless Minnesota Valley's power supplier in North Dakota agreed to buy the energy. State law and Minnesota Valley's policies cap the size of a solar array a customer can hook up to their system, Minnesota Valley argues.

The Upper Sioux Community proposed a 2.5-megawatt solar project, more than 62 times larger than the supposed limit.

When the tribe started building the solar array, Minnesota Valley said Upper Sioux had to stop and follow utility rules or risk being disconnected from electric service.

The Upper Sioux wrote back, saying the solar power would go directly to the casino and not flow back onto the larger power grid. In their view, the Minnesota laws and the utility policy govern a cooperative buying electricity from its customers.

Wolf River, the tribe's contractor, said in a letter that the system is designed "not to touch" the utility-owned portion of the electric system. General Manager Justin Nielsen said Wolf River moved forward after a study by a Minnesota Valley-contracted firm found the project would not cause problems for the grid.

Minnesota Valley believes the solar array would still be connected to its system because the panels would provide electricity to the casino at the same time as Minnesota Valley. But either way, Jensvold said, "we'll demonstrate that state laws don't apply on tribal lands."

While the dispute is unusual in many ways, there has long been tension between solar developers and utilities over what customers can build under Minnesota law and how they're compensated.

Logan O'Grady, the executive director for the Minnesota Solar Energy Industries Association, said his trade group believes utilities block customer-owned solar to protect their own energy sales. They have challenged the state before in an effort to let customers have larger solar arrays.

"This paints a really good picture of what our members and Minnesotans around the state go through on a daily basis when they're trying to install solar on their own properties," he said.

Anton Treuer is a professor of Ojibwe at Bemidji State University who has written books on Native American history and has expertise in tribal sovereignty issues.

Treuer said tribes are governments with their own laws and have a relationship with the federal government that no state can supersede. He said that's why tribes in Minnesota can have casinos even though it's not legal elsewhere in the state. Treuer said utility laws are within this realm.

"But if the tribe signed an agreement by which they said they would adhere to state codes or company policies, that would be a consideration in the mediation," Treuer said.

Elsewhere in Minnesota, power customers have built large solar arrays of their own. Flint Hills Resources built a 45-megawatt solar project that directly powers its oil refinery in Rosemount. Flint Hills struck a deal with Xcel Energy for the refinery to run the array.

The Prairie Island Indian Community built a 5.4-megawatt solar project for its casino as part of a $46.2 million state grant for the tribe to reach net-zero carbon emissions. In that case, Dakota Electric Association and Great River Energy contracted with the tribe to buy power from the solar farm.

Upper Sioux vows to move ahead

Earlier this year, the Upper Sioux and Minnesota Valley met for a one-day mediation that went nowhere, according to the tribe.

In May, the tribe filed its complaint with the PUC asking them to prevent Minnesota Valley from shutting off its power and contending such a move would be illegal.

At first, Minnesota Valley stated in a Dec. 5 letter that it would disconnect "Upper Sioux (and its affiliates — i.e. Casino)." On Tuesday, Upper Sioux leaders said Minnesota Valley later clarified it would just cut off the casino complex.

The casino has "redundancy built in" if they lose power, Jensvold said, but did not say more when asked about the potential impact on the tribe.

"You know we've been threatened for hundreds of years as a nation and we'll find a way through it," he said.