The vast, untapped potential of energy resources on Tribal lands has inspired many American Indian and Alaska Native communities to pursue energy development projects. But historical and contemporary federal, state, and local policies have influenced these projects, many times to the detriment of their progress.
The U.S. Department of Energy’s Office of Indian Energy Policy and Programs (Office of Indian Energy) has been working with Tribes to help alleviate these historic barriers and support respective Tribal community energy visions and goals.
Understanding Tribal perspectives is vital to identifying barriers and the appropriate means of overcoming them. So, over the course of 2 years, the Office of Indian Energy relied on Tribal input, in-depth research, and data collection to create a record of existing Tribal electricity access and reliability. The result is the 2023 report to Congress “Tribal Electricity Access and Reliability.”
Report Points to Unmet Needs and Funding Gaps
More investments in energy transition communities, electrical infrastructure, and resource asset development are critical needs throughout Indian Country, and unmet need for project grant funding, technical expertise, and internal capacity building continues to grow, the report reveals.
Of nearly 690 applications the Office of Indian Energy received between 2010 and 2021, the Office only had enough funding to award grants to 30% of applicants. Consequently, nearly 70% percent of applicants were not funded, representing approximately $245 million in unfunded requests and more than $500 million in total proposed project costs.
Climate change impacts are creating relocation infrastructure challenges as well, with $3.45 billion needed in Alaska over the next 50 years, and $1.365 billion needed in the contiguous 48 states.
For Navajo Nation Tribal members who lack access to electricity, the total estimated cost to electrify 14,063 Navajo homes is about $1 billion.
As nontaxable entities, Tribes are unable to access many federal tax incentives for clean energy project financing and other federal grant funding tends to be predominantly for early resource assessments, feasibility studies, or actual hardware installation – leaving a gap in funding for project development activities, such as design and engineering, permitting, and financing.
Initiatives to Address Report Findings
The Office of Indian Energy is using a three-pronged approach of technical assistance, financial assistance, and education and capacity building to address the energy development disparities prevalent throughout Indian Country. This approach is applied across three initiatives:
- Provide energy access to Tribal members whose homes remain unelectrified.
- Empower American Indian and Alaska Native communities to lead the transition to clean energy by providing financial and technical assistance.
- Assist Tribal Colleges and Universities (TCUs) to power their institutions with clean energy.
These initiatives – informed by Tribal constituent input – are meant to reduce the disparities discussed in the report and work toward greater Tribal energy sovereignty and self-determination.
“American Indian Tribes and Alaska Native villages have diverse capabilities and perspectives, so we need to continue respecting those unique qualities as we design and deploy our initiatives,” said Office of Indian Energy Deployment Specialist Tommy Jones. “But what this report has shown is that there are some common challenges we can address at a high level.”
Office of Indian Energy Director Wahleah Johns “was pleased to learn from the report that [the Office of Indian Energy’s] financial investments to date have contributed to building equity among energy solutions for Tribal communities.” At the same time, she said, the report underscores the ongoing barriers and unmet need created by funding gaps. “We need to continue ensuring that a wide range of opportunities are available to meet the needs of Tribes, regardless of their financial, geographic, or demographic position.”
To address the report findings, and building on the over $120 million in Tribal energy investments since 2010, the Office of Indian Energy announced an additional $75 million for 21 Tribal energy Tribal energy projects across the country.
In May, the Office of Indian Energy announced eighteen Tribal energy projects to receive $34 million. Those projects are estimated to result in more than nine megawatts of new clean energy generation and more than 6,700 megawatt-hours of battery storage, impact 1,000 tribal buildings, and save these communities more than $100 million over the life of the systems. This investment will yield tangible benefits year after year to improve the quality of life for these underserved communities.
In September, the Office of Indian Energy announced an additional thirteen Tribal projects across the country are receiving $38 million in funding. These cost-shared projects, valued at nearly $55 million, are estimated to result in more than 9.6 megawatts of new clean energy generation and more than 2,600 megawatt-hours of battery storage, affect more than 1,300 Tribal buildings, and save Tribal communities more than $125 million over the life of the systems.
And in December, the Office of Indian Energy announced that two Tribal projects at Blackfeet Community College and Turtle Mountain Community College are receiving $3 million in funding to lower their operating costs and provide a foundation for clean energy curricula.
Learn more about the clean energy project development the Office has supported in our Indian Energy Success Stories blog series.
Among the unprecedented funding through the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), additional funding sources became available that could significantly address Tribal electricity access and reliability, including:
Tribal Electrification Program – Through a Tribal caucus and a Tribal consultation, Tribal leaders provided input on new funding authorities in the IRA for renewable electric infrastructure and related energy and electric programs. The result is the Department of the Interior’s Tribal Electrification Program, which leverages $145.5 million to fund household electrification projects in stages ranging from early planning to implementation plans and actions that are already underway.
Tribal Energy Loan Guarantee Program – This program provides loan and loan guarantees that do not require cost-share or expire. The IRA increased the available loan authority from $2 billion to $20 billion and provided $75 million to carry out the program. The IRA also made permanent Tribal borrowers’ ability to apply for direct loans from the U.S. Treasury’s Federal Financing Bank. Program funds can be applied to a broad range of projects and activities for the development of energy resources, products, and services that utilize commercial technology.
Tax Incentives – Under the IRA, Tribes may now benefit from income tax credits even though they may not owe federal income taxes. Tribal governments and Alaska Native Corporations may qualify for an elective, or direct payment in lieu of claiming an income tax credit, that reimburses part of the cost of building a clean energy project or purchasing a clean energy vehicle for non-personal use. The IRA also includes bonus credit amounts several clean energy tax incentives to spur investment in communities most in need of new economic development.
Memorandum of Understanding (MOU) with the Navajo Nation and the Hopi Tribe – These MOUs aim to support the Tribes’ efforts towards economic revitalization and ensuring a fair chance at benefitting from federal funding for infrastructure and economic development projects. The DOE and other federal agencies have signed on to launch multi-year, multi-agency agreements to ease access to grants from the IRA, BIL, and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act.
Learn More About How Tribal Input Informed the Report
You can dive deeper into the Tribal input that shaped the report findings by reviewing the listening session materials below.
The first listening session had more than 300 registrants and more than 200 attendees, 55% of whom were representatives from Tribes. View the polling results. The second listening session discussed the polling results from Listening Session 1 and findings from the Office’s research. It also provided Tribal leaders and staff from energy, planning, natural resources, and other relevant departments the opportunity to make recommendations on the report.