10:40am

Wed May 18, 2011
Energy

Seneca Nation fights for control of Kinzua Dam

Over the past few years the Seneca Nation has been hard at work, building an energy investment company from scratch.

But the goal isn't to use the Nation's land to build a wind farm or set up solar panels.

The goal is to win back the Kinzua Dam.  And at stake is tens of millions of dollars.

Righting wrongs

The Senecas claim that the Kinzua Dam in Pennsylvania was illegally built on their territory in the early 1960s, when the tribe was forced from thousands of acres of land near the Allegheny Forest.  

"Homes were burnt down so [Senecas] couldn't return. Bodies were dug up," says Dave Kimelberg, a Seneca who is heading up the Nation's energy efforts. "It was really a pretty horrific time period for the Seneca Nation."

The fight over the land was so intense that it ultimately reached the desk of President John F. Kennedy.  He sided against the Senecas, who lacked political and economic influence, says Kimelberg.

"Frankly we just got run right over," he says.

Johnny Cash even wrote a song about the incident.

During that traumatic time, Basil Williams, Kimelberg's uncle, was president of the Nation.  And now, Kimelberg is leading the charge to win control of Kinzua.

The dam generates up to 450 megawatts of electricity every year for the Pittsburgh area.  It's currently administered by First Energy, but the Senecas have created their own company, Seneca Energy, and are investing heavily in their claim to operate the highly profitable facility.

"It would be a first step in really righting some serious past wrongs," Kimelberg says.

Bureaucratic battle looms

Ohio-based First Energy's 50-year contract to operate the dam expires in November of 2015. Seeing an opportunity, Seneca Energy is throwing its hat in the ring for the new license.

But First Energy isn't going down without a fight.

"When you look at all the facts, we believe that makes a very strong case as to why we should continue to have the operating license for this facility," says Mark Durbin of First Energy.

The Fortune 500 company has run the dam since its ribbon cutting in 1965. And while exact figures aren't public, Durbin admits the corporation has generated hundreds of millions of dollars running the dam.

Operating the facility is complicated, and according to Durbin, First Energy has a near spotless track record in doing it.

The rules of relicensing also favor them.

"If there are what they call 'insignificant differences' between the competing applications, the existing licensee historically has received that new license. They call this the 'incumbent preference'," Durbin says.

Leaving little to chance

But the Senecas have their own sort of incumbency. Kimelberg admits that some could see the Nation's bid for the dam as an attempt at reparations.  But he says it's impossible to ignore the historical context surrounding control of the dam.

"If there's one group you can count on to stay in the area and that's committed to the area and committed to economic development, it's the Senecas," he says. "We were the first here and we're probably going to be the last out."

Both companies are leaving little to chance. Through an army of lawyers they will lobby the federal Kinzua Dam Re-licensing Commission. And the Senecas have just four short years to try to build credibility by hiring expertise for their upstart company.

Perhaps their biggest obstacle is the fact that the company has no experience operating dams or any other large energy project.  But Kimelberg says that won't stop the tribe.

"We didn't have any experience running casinos, either, when we first got into it," says Kimelberg. "But we run close to a billion dollar a year, top-line casino business these days."

To set itself apart from First Energy, Seneca Energy has promised to reinvest profits from the dam into the Nation’s economic development. Kimelberg says that's part of a long-term effort to transition the Senecas away from cigarettes and gambling.