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- By Chez Oxendine
- Energy | Environment
Senate lawmakers examined why a federal tribal energy loan program has closed only one deal in seven years during a hearing Tuesday that revealed systematic barriers preventing tribes from accessing financing.
The Government Accountability Office found the Department of Energy's Tribal Energy Financing Program has struggled with high costs, lengthy reviews and limited staff expertise, according to a GAO report requested in March by Senate Committee on Indian Affairs Chair Lisa Murkowski, R-Alaska.
Of 20 applications totaling about $15 billion since 2018, more than half have been withdrawn or abandoned. Seven remain active, but were paused earlier this year during an administrative review.
The program's sole success was a $100 million partial loan guarantee for the Viejas Band of Kumeyaay Indians' solar-plus-storage microgrid, which took 645 days to close.
“Tribes have significant untapped energy potential, but the current process is not working for them,” GAO Natural Resources and Environment Director Anna Maria Ortiz told the Senate Committee on Indian Affairs during a Sept. 10 hearing.
The Energy Department's process saddles applicants with unpredictable third-party legal and technical review fees that can run into the millions, on top of $10 million to $30 million in early-stage development costs, Ortiz said. The GAO recommended the Energy Department reduce or eliminate those fees, streamline applications, clarify guidance and maintain dedicated staff with tribal expertise. The department agreed with all five recommendations, according to the report.
Tribal lands hold significant energy resources, Ortiz said. They contain an estimated 30% of U.S. coal reserves west of the Mississippi, 20% of known oil and gas reserves, and 6.5 % of utility-scale renewable potential. GAO estimates that 86% of that potential remains undeveloped.
For Alaska Native communities, the barriers are worse due to geography. Jocelyn Fenton, director of programs for the Denali Commission, told lawmakers that roughly 200 rural Alaska villages operate isolated microgrids, most powered by diesel. Electricity costs average 47 cents per kilowatt-hour, with some villages paying more than triple that amount.
That equals roughly 27% of monthly income spent on energy, Fenton said. Many bulk fuel tank farms and powerhouses are decades past their intended lifespan, with a replacement backlog exceeding $1 billion.
Fenton urged Congress to recognize bulk fuel storage as core energy infrastructure in federal programs, expand financing tools beyond grants and tailor assistance to small, remote tribal utilities. She cited hybrid systems that pair diesel with hydro or geothermal as promising options to lower costs and improve reliability.
“Energy security is the foundation of economic prosperity, something critically lacking in most of these communities and desperately in need of additional investments, both grants and loans, not just for the sake of these communities on the edge of America but for the nation to ensure a strong Arctic presence,” Fenton said in her testimony.
David Conrad, acting director of the Energy Department's Office of Indian Energy Policy and Programs, said his office has funded more than 240 tribal energy projects since 2010, improving 11,000 buildings and saving tribes an estimated $530 million. Nearly a third of deployment funding has gone to Alaska.
Conrad acknowledged that many tribal communities face outages 6.5 times more often than the U.S. average and pay four times more for power. Some are at the end of poor-performing circuits, while others have no grid connection at all.
Conrad's testimony highlighted recent Energy Department efforts to help tribes structure high-value energy deals, place fellows in tribal institutions and expand the Tribal Energy Navigator service to connect applicants with funding. He also noted that the program's structure, along with the loss of Inflation Reduction Act funding in July, limits what the loan program can deliver without changes.
Committee members signaled interest in pursuing the GAO's recommendations. Vice Chair Sen. Brian Schatz, D-Hawaii, said the findings underscored the need for "a program that actually works for tribes, not against them."
Murkowski said in the hearing's opening remarks that tribes needed access to the kind of financing provided by programs like the Tribal Energy Financing Program to correct a long-standing gap in electrification.
“As more tribes jump into the energy development space and look to build resilience in their existing energy systems, lower costs, and generate revenue that can then be used to boost the tribal economy and fund social services – they often need greater amounts of capital,” Murkowski said. “We want to work together to ensure that tribes are poised to take advantage of their resources, build more resilient, cost-effective energy systems, and benefit from and contribute to this administration's focus on unleashing American energy.”
The Tribal Energy Financing Program remains a largely untapped tool in the push for tribal energy sovereignty. Witnesses agreed that without lower costs, clearer rules and staff who understand tribal realities, the program will continue to fall short of its promise.
“Energy projects can be transformative for tribal economies and communities,” Ortiz said. “But the barriers we have identified have to be addressed if tribes are going to realize that potential.”
