Harnessing economic power and fueling a cleaner-energy future
The Oceti Sakowin Power Authority explores how IRA tax credits and incentives could electrify its plan for renewable energy resources.
THE PURPOSE WAS CLEAR.
A PATH TOWARD
REALIZING IT WASN’T.
The Situation
Seven Sioux Tribes shared a vision for renewable energy. That vision was driven by potential wind energy that could be harnessed from Tribal lands and generate emission-free electricity for their communities. It focused on delivering economic empowerment. And it crystallized into the Oceti Sakowin (pronounced O-CHET-ee Sha-KO-wee) Power Project, a multi-tribal power authority.
In 2015, the Cheyenne River Sioux Tribe, Crow Creek Sioux Tribe, Flandreau Santee Sioux Tribe, Oglala Sioux Tribe, Rosebud Sioux Tribe, Standing Rock Sioux Tribe, and Yankton Sioux Tribe established the Oceti Sakowin Power Authority (OSPA). Together, the Sioux Member Tribes refined their vision to develop and own Tribal renewable energy resources by financing, developing, constructing, and operating power generation and transmission facilities for the wholesale market. Over time, the OSPA identified a clear path to placing up to 2 gigawatts of emission-free electricity into service in South Dakota with a structure that could support the core values of the Sioux Member Tribes. This meant preserving the land on which the equipment would operate, maintaining ownership and decision-making over the project, and hiring construction and operations roles directly from the Tribal community.
The Inflation Reduction Act of 2022 (IRA) included two new credit delivery mechanisms—elective pay, or “direct pay,” and transferability—that could enable certain organizations, including Tribal entities, to take advantage of clean energy tax credits. For the OSPA, the opportunity was clear. The OSPA wanted greater clarity around the intricate regulatory landscape, particularly concerning investment and production tax credits (ITC and PTC) within the IRA framework. This could translate into capital that the OSPA could use to further its goals. How might they access it?
THE SOLVE
A SPOTLIGHT ON
CLEAN ENERGY TAX
CREDITS ILLUMINATED
A PATH FORWARD.
The Impact
Leveraging the new “direct pay” tax credits enables the OSPA to maintain Tribal ownership of what’s intended to be among the largest wind power developments in the country1. With Deloitte’s services, the OSPA has enhanced the project’s financial viability and sustainability, realizing meaningful amounts of capital that weren’t available before. It is building capacity and furthering the founders’ vision for self-sufficiency and resilience for future Tribal leaders and community members.
The close collaboration between Deloitte and the OSPA resulted in tax credit benefits while adhering to regulatory compliance and project sustainability. This includes enhancing ITC or PTC utilization, reducing project financing costs, obtaining government grants, and enhancing long-term profitability.
And the work continues.
In the latest development of the engagement, Deloitte’s Consulting and Tax professionals assisted OSPA in the preparation and submission of a grant application, which aims to secure the essential funding to enhance the local infrastructure and transmission required for the project. “The timely development of the Tribes’ utility-scale wind and solar resources hinges upon a significant investment in new transmission, and it is beyond the reach of individual Tribes,” said Lyle Jack, OSPA Chairman of the Board. “Renewable energy development is an effective option for us to strengthen and diversify our Tribal economies and create jobs, and to do our part in combatting climate change.”