M&A plays a crucial role in helping the Hopi Tribe diversify its portfolio of water and energy resources.
Client: Hopi Tribe- Time frame: 2008–present
- Location: Hopi Reservation and federal trust lands, northern Arizona
M&A was retained to help the Hopi Tribe evaluate its existing water resource portfolio and identify ways to optimize its water supply reliability. Our Water Policy & Economics group is also currently participating in ongoing northern Arizona water-settlement negotiations, supporting the Tribe’s water team, general counsel, and outside counsel. Finally, M&A is also working cooperatively with the Tribe and a consortium of power companies to develop programs for characterizing the deep sedimentary rocks underlying the Hopi Reservation. In addition to being potential targets for water-resource development, these formations hold significant promise for geologic carbon sequestration, coalbed methane development, and conventional oil and gas extraction.
M&A is evaluating not only the Tribe’s current water portfolio but also potentially available resources in the context of quality, reliability, and availability over time. We quantified the economic- and policy-related tradeoffs associated with each portfolio component and constructed an economic optimization model to test the reliability and cost of various resource-acquisition scenarios. In addition, we recommended mechanisms for securing — or “firming” — supplemental water supplies for shortage periods; these mechanisms include storage and recovery as well as water exchanges. Our economic optimization model was key to developing these recommendations. Other related services include helping the Hopi Tribe implement the firming strategy, which requires agreements for the acquisition, underground storage, and future recovery and exchange of CAP water.
M&A provides expert advice to the tribal negotiating team on the economic, policy, and institutional factors affecting Hopi water-resource interests. Our work is helping the Tribe evaluate a range of settlement proposals offered by multiple parties. We have prepared briefing papers on key settlement-related water issues and worked with a technical / financial subgroup to develop maps, white papers, and factual evaluations for the negotiating team.
M&A is working with the Tribe and a consortium of utilities led by the Salt River Project to develop and fund a program for characterizing the geology under the Hopi Reservation and Black Mesa. A deep drilling program will be designed to identify the most promising geologic formations for carbon sequestration and to develop information on coalbed methane, conventional oil and gas, and water resources.
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