Federal hurdles, including onerous fees and development delays, are seriously hampering tribal nations’ efforts to implement ambitious alternative energy projects that could generate reliable power, new jobs, clean energy, and massive new economic opportunities.
Although the Inflation Reduction Act (IRA) committed hundreds of billions to support clean energy initiatives across the country, a perfect storm of interconnection requirements, a high volume of complex interconnection requests, and Federal Energy Regulatory Commission (FERC) fees to remain in the development queue have all conspired to create a logjam in the system.
This has proved particularly challenging for many tribes, which are looking to alternative energy solutions,(e.g., solar, wind, and geothermal) as reliable sources of power rather than purely green power initiatives.
“Tribes are unfairly being lumped into the same pool as speculative developers,” says Brian McLaughlin, CEO of PlanitWorks. “At the end of the day, these communities simply want access to reliable power. Understandably, they’d like to take charge of their own energy destinies.”
Big Fees Are Impeding Progress
Per FERC’s Order 2023, within 14 to 30 days, all interconnection requests must be accompanied by a commercial readiness deposit of $5 million (reduced from an original $7.5 million). These fees are designed to limit speculative requests from developers that are actually unprepared to perform the work or that abruptly withdraw (the $5 million would cover withdrawal penalties).
But for most tribes, coming up with that kind of money on such short notice is all but impossible. And to reiterate, the tribes aren’t interested in speculating, they’re interested in generating reliable power.
In its August 2023 report to Congress, DOE’s Office of Indian Energy released the results of a tribal survey showing that 72% of tribes had no ownership or control of their electrical infrastructure. The survey also revealed that tribes suffered an average of 10.5 power outages per year compared to a national average of just 1.6 annual outages.
In other words, far from dabbling in speculative bidding for interconnection opportunities, the tribes simply want access to, and some modicum of control over, a reliable power source.
“If you have homes that don’t have electricity in them, do you believe that they’re really thinking about clean energy,” asks Onna Labeu, the Indigenous Power & Light Fund’s managing director and the former director of the Office of Indian Economic Development at the U.S. Department of the Interior.
Labeu added that while it’s understandable the federal government is focused on reducing emissions, it’s important to remember “there are communities that are way ahead of everybody else, but the tribal communities are significantly behind.”
Reliable Power is the Focus
Ironically, Order 2023 is designed to accelerate the approval process for interconnection requests. According to a report by the Berkeley Lab of the Lawrence Livermore Laboratory, the number of requests in recent years has exploded, most in solar, wind, and storage.
Today more than 10,000 projects (a 40% year over year increase) representing roughly 1,350GW of power generation and another 680GW of storage await approval to connect to the grid. Because part of that effort to speed up things includes the hefty fees to ward off speculative types, tribes are asking for an exemption.
“We have petitioned FERC on behalf of the tribes we serve to waive [or defer] the commercial readiness deposit … and to allow tribes to remain in the interconnection queue,” said Chéri Smith, CEO of the Alliance for Tribal Clean Energy.
She noted that large alternative energy projects are “big economic engines” that not only could produce reliable sources of energy, but also generate new jobs and other economic opportunities.
