The Standing Rock Sioux reservation near the border of North and South Dakota has some of the US’ most powerful winds, with 32kph gusts regularly scouring its vast plains.
The tribe in 2020 launched a plan to harness that energy with what would be the country’s first tribal-owned utility-scale wind farm — a project meant to supply jobs, money and electricity to a place where those things are in short supply.
The project is at the heart of the Standing Rock Sioux’s long-term economic strategy and revenue from selling power to the regional grid would replace the reservation’s casino, which nets about US$6 million per year, as the biggest source of revenue.
The bipartisan infrastructure bill and Inflation Reduction Act (IRA) enacted over the past two years have created enormous opportunities to develop wind and solar projects on tribal lands, offering about US$14 billion in subsidies and incentives.
The IRA also allows tribes and other tax-exempt entities to access the incentives in the form of a direct payment, instead of a typical tax break.
However, unlike the wind blowing across the great plains, the project is going nowhere fast. Tribes cannot access key incentives for larger clean energy projects until they secure an agreement to connect to the regional electrical grid. That is an expensive process that can take years and requires technical expertise that most tribes lack. Other incentives provided under the legislation expire as early as next year and 2026.
That could jeopardize a “once in a lifetime opportunity,” said Cheri Smith, president of the Alliance for Tribal Clean Energy, a nonprofit that is helping tribes develop clean energy.
“All of that money isn’t going to do its job unless we remove these roadblocks,” Smith said.
The Standing Rock Sioux’s project is one of about a dozen larger-scale clean energy projects proposed by tribes seeking to take advantage of new federal green energy subsidies, according to Reuters interviews with more than two dozen tribal representatives, government officials and industry experts.
The projects combined would produce at least 4 gigawatts of electricity.
Those tribal leaders said that half of these projects are slogging through the grid connection process, with the rest yet to begin the process, reflecting the difficulties small developers face navigating the grid interconnection process and accessing IRA incentives.
The tribes interviewed by Reuters say that, unlike their bigger corporate rivals, tribes lack the upfront capital and internal know-how to navigate the regulatory hurdles to building and connecting a major power project to the grid. That means the tribes — which are among the poorest communities in the country — could miss out on a big development opportunity and the US could miss out on their substantial potential to generate renewable energy at a time of huge demand for climate-friendly power.
A US Department of the Treasury official told Reuters that it held four formal consultations with tribes as it developed the IRA provisions.
The official acknowledged the financial constraints on tribes in the predevelopment stage, but said that the IRA does not allow the release of funds before interconnection agreements are secured.
“In the short term it will take time for projects to get off the ground and for tribes to figure out how to use the credits, but it’s a significant opportunity,” the official said.
The Standing Rock Sioux has so far spent US$3 million on technical studies and fees to remain in the funding queue, with no guarantee of approval. More deposits ranging from US$1 million to US$10 million might be forthcoming.
That could amount to a missed opportunity: Tribal lands account for about 6.5 percent of the country’s renewable energy potential, the US National Renewable Energy Laboratory said.
Yet, Native American households lack access to electricity at far higher rates than the national average, the US Energy Information Administration said.
Only 30 percent of the Navajo Nation reservation has electricity, despite being surrounded by large cities like Phoenix, Arizona.
The Standing Rock Sioux tribe’s development authority, called SAGE, proposed the 235 megawatt wind farm three years ago. They named the project Anpetu Wi, which means “the beginning of a new day” in the Lakota language.
The tribe led massive protests against the Dakota Access oil pipeline in 2016 that drew international support and attention.
SAGE estimates the wind farm would bring in US$210 million of revenue over 25 years from the sale of power to the regional grid, creating dozens of direct jobs and more indirectly as the tribe invests in new initiatives.
JOBS, MONEY
More money and jobs would help the tribe, which suffers from 50 percent unemployment and a 37 percent poverty rate, data from the US Department of the Interior and US Census showed, driven in part by high electricity rates.
The cost of electricity on the reservation is double that in nearby Bismarck, North Dakota, SAGE director Joe McNeil said.
“Energy inequity has been a core driver of this economic disparity,” McNeil said.
He said the tribe could control electricity prices if it owned Anpetu Wi. Wind farm revenue would be reinvested in local distributed solar energy and microgrid projects that would lower tribal electricity bills, and fund other projects such as regenerative agriculture and a cultural museum.
So far, the tribe has secured a site and completed studies on its wind potential, and the cultural and environmental impacts as part of the process of securing a connection agreement from the regional grid operator, the Southwest Power Pool, one of seven non-profit transmission organizations in the US charged with ensuring reliable power supply in its region.
McNeil said the project is in the middle of the pack in the queue for Southwest Power Pool’s more than 400 projects.
Southwest Power Pool did not respond to requests for comment.
The tribe raised much of the US$3 million it has spent so far from philanthropies and family funds, including the Sierra Club Foundation, Wallace Global Fund and the Bush Foundation in the form of forgivable loans.
Eileen Briggs, grantmaking director for the Bush Foundation, said the risk is worthwhile, given the potential impact if the project succeeds.
“Beyond the impacts for Standing Rock Sioux, tribal nations across the country will have a proven example of how to develop and own renewable power systems,” Briggs said.
Without philanthropic support, highly capital intensive projects “can effectively shut out anyone but the largest, most established developers,” she said.
Other tribes are facing such obstacles.
Navajo Power, a project developer that works with tribal governments, has five proposed clean power projects in the queue for interconnection, including one initiated three years ago.
It, too, has sought out philanthropies and family funds to get the projects through permitting and interconnection, Navajo Power chief executive officer Brett Isaac said.
“The pre-development phase the most risky phase, where tribes themselves just don’t have the stomach in their investment risk tolerance,” Isaac said.
Meanwhile, the Moapa Southern Paiute in Nevada is developing nearly 2 gigawatts of solar power to sell to large markets like Las Vegas, but the tribe opted for land-lease instead of ownership because of the difficulties in accessing upfront capital.
“We want ownership so badly we can taste it,” Moapa Southern Paiute chairman Greg Anderson said.
In May, Smith, a former executive at Tesla Solar City, convened a closed-door gathering in St Paul, Minnesota, of 20 officials from the US Federal Energy Regulatory Commission; more than a dozen officials from the Energy and Interior departments, and dozens of tribal energy leaders from across the US to address the obstacles faced by the tribes.
Reuters attended the conference.
Jeremiah Baumann, chief of staff to the under secretary for infrastructure at the Energy Department, told the meeting that the agency’s loan energy programs have not been effective in helping the tribes. “Too many programs have been too hard to access; the administrative burdens are too high,” Baumann said.
Acting Federal Energy Regulatory Commission Chairman Willie Phillips told the meeting that the commission was working to address the backlog of projects in the interconnection queue.
It enacted broad reforms two months later, but these did not specifically address the problems of upfront capital.
Smith said that she would ask the commission to drastically reduce deposits and interconnection costs for tribes, and give priority to tribal projects in the queue.
Commission spokeswoman Celeste Miller said that it plans to continue getting input from tribal governments.
“This rule is just the beginning of the commission’s transmission reform process. There is more to come,” Miller said.
Smith said she hopes federal agencies do not miss the chance to incorporate tribal feedback.
“Electricity cannot be a privilege. It’s a right and for us to have a truly just transition, it is essential that it be guided by Native people, for Native people,” she said.
Valerie Volcovici covers US environment and energy policy from Washington. She is focused on climate and environmental regulations at federal agencies and in the US Congress. She also covers the impact of these regulatory changes across the US. Other areas of coverage include plastic pollution and international climate negotiations.
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