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New legislation could encourage Native American tribes to develop renewable energy projects

May 30, 2010


Despite the fact that 95 million acres of land are currently under tribal management in the US, and much of that land has excellent potential for generating clean energy, green projects by Indian tribes still remains largely stagnant due to the lack of capital to finance projects.

And tribal governments are reluctant to apply for state renewable energy incentives programs to help fund renewable energy projects because these programs often require the tribes to set up state-chartered organizations, which could result in the relinquishment of some of the tribes sovereign immunity.
Another hurdle is that tribes are considered tax-exempt entities by the IRS and therefore aren’t eligible to claim federal production-tax credit for renewable-energy projects.

However, new legislation is now pending in Congress (Sen. Tim Johnson’s Senate Bill 802and Rep. Raúl Grijalva’s “Fair Credit Act” House Resolution 29820) that would allow tribes to transfer their share of the tax credit to private entities financing projects in a joint venture.

This initiative was spurred by a recent report from the National Tribal Environmental Council, Native American Rights Fund, Intertribal Council on Utility Policy and National Wildlife Federation.  The report maps the possibilities for renewable energy in Indian country and details case studies of clean energy and energy efficiency/weatherization.

The report notes that there are over 1.6 million acres of Hopi tribal lands in northern Arizona where the wind-energy potential is very high.  As a result, the Hopi Tribe is currently updating its strategic plan for renewable energy projects, weatherization and energy efficiency, and possibly creating an Electrical Utility Authority.

The report highlighted another Arizona tribe, the Hualapai, which depends on tourism at its popular Grand Canyon West reservation. But strained infrastructure and water resources have long limited the tribe’s capacity for expanding necessary tourism facilities. So, the tribe recently used Department of Energy funds to build two photovoltaic arrays and pump houses to power its 13-mile water pipeline with solar energy. The Hualapai Tribe currently sees about 150,000 visitors annually and projects a tenfold increase once the solar-powered utility infrastructure is complete.
In Arizona and from coast to coast, the vast potential on tribal lands to generate clean energy from renewable resources means that Indian tribes can help provide global-warming solutions and put America on the path to energy independence.
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