Seneca Indian Nation pursues hydropower license

SALAMANCA, N.Y. (AP) – The Seneca Indian Nation is seeking control of a northern Pennsylvania hydropower operation in a move toward economic diversity that Seneca leaders say would also right a historic wrong.

The western New York nation, best known for its tax-free cigarette sales and three casinos, announced Tuesday that it has filed a preliminary application with the Federal Energy Regulatory Commission for a license to operate the Seneca Pumped Storage Project at Kinzua Dam on the Allegheny River.

The current 50-year license, held by FirstEnergy Corp. of Akron, Ohio, expires in 2015.

Construction of the dam near the New York-Pennsylvania border in the 1960s displaced more than 600 Seneca members, who watched as their homes were bulldozed or burned after the U.S. government took control of 10,000 acres of the Senecas' Allegany reservation. The land had been granted to the Senecas in a 1794 treaty signed by George Washington.

Seneca leaders were told the dam was needed to protect Pittsburgh and other downriver cities from flooding, but they were not told of plans for a 450-megawatt hydroelectric plant, Seneca President Robert Odawi Porter said.

The plant has generated hundreds of millions of dollars in profits since beginning operation in 1970.

"We have not received one penny of these profits,'' the newly elected president said at the tribe's administrative building in New York's Southern Tier. "We are here today to begin the process of correcting this historic injustice.''

Porter said the nation would immediately begin seeking an experienced partner to operate the plant. The license application process will take several years.

FirstEnergy has filed its intent to apply for renewal of its license, spokesman Mark Durbin said. FirstEnergy and its predecessor companies have spent tens of millions of dollars on improvements over the last 40 years and have been the plant's sole operators, he said. The company also operates another pumped storage hydrofacility in New Jersey.

"We believe that makes a pretty strong case that FERC should allow us to get the relicense of the facility,'' Durbin said.

The Senecas' cite past cultural, economic and environmental harm in seeking the license.

"Our application makes the case that the Seneca Nation has suffered immensely from the operation of the Kinzua Dam and that the continued operation of the Seneca Pump Storage facility misappropriates Seneca Nation lands and waters in violation of federal law,'' Porter said.

Seneca member Dave Bova remembers being uprooted at the age of 11, along with his parents and five sisters, and relocated to a subdivision with other Seneca families. While the new house, with its running water, was more modern, it was heartbreaking, he said, to see the woods where he'd learned to hunt razed and burned and the houses spraypainted with numbers that signaled their selection for destruction. The land is now under water.

"It was very traumatic,'' Bova said Tuesday.

The Senecas' takeover of the hydropower plant, with its estimated $13 million in annual profits, also would further diversify the tribe's economy, a goal that has become more pressing as state and federal legislation has cut into the discount cigarette sales that fund health and education programs.

The federal government this year outlawed the mailing of cigarettes. New York state, meanwhile, adopted plans to begin collecting $4.35 per pack sales tax on cigarettes sold to non-Indian smokeshop customers, a move that would force tribal retailers to raise their prices and lose business. The tax collections were scheduled to begin Sept. 1 but have been delayed because of legal challenges.

Last month, the Seneca Nation's business development arm, Seneca Holdings LLC, announced its first major deal since being formed to diversify the economy, acquiring a controlling interest in Washington, D.C.-based wireless and telecommunications provider CT COMM.