What is Energy?
Energy is created from physical or chemical resources to provide the power needed to bring electricity, heat, and water to the world. There are many different types of energy sources: oil, wind, solar, geothermal, natural gas, coal, and electricity. To produce electricity, energy is created, converted through generators, and then sent through transmission lines to power homes, factories, and businesses. In 2015, 33% of the United States’ electricity was produced by coal, and another 33% was produced by natural gas.1 Energy is all around us, and is constantly changing due to innovative technologies that improve our ability to create and store electricity.
How is energy produced?
Energy is produced in many different ways from many different sources. When energy is produced by oil, wind, solar etc. the generation of these sources are converted into electricity at a power plant. This electricity is then transported through electric lines to power residential homes and industrial buildings. In 2015, North Dakota produced 71% of its electricity through burning coal, while 21.5% came from wind, and 5% from hydroelectric power.2 In North Dakota, heat is created using utility gas in 41.6% of homes, and electricity is responsible for heating 37.1% of homes.3Surprisingly, sections of our current power grid are over 40 years old, providing challenges for electricity transmission. Our electric transmission grids were created in the 1950’s and 1960’s with the intention of lasting only 50 years before it would need updates.4 Replacing the entire electric grid with new electricity generation infrastructure is estimated to cost approximately 5 trillion dollars.5 The electric grid will require significant investments from the Federal government, States, and Tribes and will likely include more affordable and cleaner renewable energy sources.5
What does energy independence mean for a Tribe?
Energy independence is the ability of a Tribe to produce enough energy to meet the communities’ needs without relying on outside sources. Energy independence is obtained through the production of energy that is controlled by the Tribe and is done in a way that is consistent with its environmental, economic, and development goals. Not only does becoming energy independent support economic growth, it can provide more reliable power, it supports tribal self-determination, and enacts policies that were designed by and benefits the Tribe. One of the main obstacles to becoming energy independent is developing the money, expertise, and knowledge to create the proper infrastructure to supply the necessary residents of the area. When considering whether or not to attempt to become energy independent, a Tribe must take into consideration whether or not the energy infrastructure that supplies its communities is sufficient, who owns and operates the energy infrastructure, and whether or not it makes economic sense to make the long-term and substantial investment.
Tribal Energy Independence Case Studies
In order to provide a closer look at some of the challenges, opportunities and details of Tribes that have gone through the process of becoming energy independent, we have highlighted several case studies that were compiled and published in 2010. Some of the most commonly identified benefits include lowering the cost of electricity for their tribal members, increasing the reliability of electricity to rural areas, supporting policies that benefit the Tribe, and an increase in job opportunities for tribal members.7 The Federal Government over time has enacted laws to help Tribes construct and fund energy improvement projects. For example, with the help of the American Recovery and Reinvestment Act of 2009, Tribes were provided with direct block grants for energy efficiency projects on their reservations.8
Case Study #1: In 1991, the Fort Mojave Indians became one of the first Tribes to bring electric utility into operation for complete and total control of the ownership of the utilities on their reservation.8
Benefits of Becoming Energy Independent
Economic saving by providing lower cost electricity to their Tribal members
Being able to support Tribal preference for job hiring
Challenges
Lack of startup capital to fund necessary projects
Short term contracts were expensive due to the unpredictability of power prices
Lessons Learned
Take the needed time to transition
Don’t use a significant proportion of the Tribe’s financial reserves for the transition
Give sufficient thought and planning to the financial component of the transition
Case Study #2: The Tohono O’odham Nation began their tribal utility authority in 1970 and began producing their own power by the early 1980’s.
Benefits of Becoming Energy Independent
Because the utility is owned and operated by the Tribe, they are able to enact policies and make investments that are in the best interests of their tribal members
Challenges
There are few economic growth opportunities for future projects due to the vastness of the reservation and the lack of resources
Lack of collateral for loans to begin purchasing the utilities from outside sources as well as the money needed for startup
Lessons Learned
Set up a Board of Directors with members that have experience in utility operation and/or business
Stay out of Tribal politics to separate the political end of tribal operations from the service end provided by the utility company
Don’t run the operation like a typical Tribal government program, run it like a business
Case Study #3: In 2016, the Blue Lake Rancheria Tribe completed a microgrid for their land.10
Benefits of Becoming Energy Independent
Greater electricity reliability in the face of natural disasters
The Tribe was able to extend past the confines of the tribal land base making it a flexible system capable of adding to the broader regional power generation
Tribal member’s direct economic savings were realized by providing less costly power than the previous provider
Challenges
Being able to include renewable energy generation and storage for a microgrid system was expensive
Lessons Learned
Implementing good planning and project management with a clear “concept of operations” on the ground was essential
Don’t use a significant proportion of the Tribe’s financial reserves in the transition.
Give sufficient thought to the financial end of the transition as well as taking enough time and planning to make the transition
Don’t expect the system to be perfect right away
Conclusion
Energy independence amongst tribes is a long-term goal with many obstacles that need to be overcome before it can become a reality. Different tribes have become energy independent for different reasons, with different goals in mind. Overall energy independence is the process of being able to control one’s energy production, transmission, and maintenance and tribes are able to undertake the procedures required in becoming independent. Stay tuned for our next couple of blog articles to understand what energy independence would look like in North Dakota and for the Three Affiliated Tribes!