Electricity Access in the Navajo Nation

Electricity Access in the Navajo Nation

PAYNE INSTITUTE COMMENTARY SERIES: COMMENTARY

By Kristin Ziv, Daniel Cardenas, Richard Luarkie, Debabrata Chattopadhyay, and Morgan Bazilian

October 10, 2024

Many Navajo Tribal members, some 13,000 households, living on the Nation’s reservation still lack access to electricity services. These Navajo households make up most of the 17,000 native American tribal homes without electricity, according to the US Department of Energy’s Office of Indian Affairs. Want of electricity harms public health, education, and economic development outcomes.

The Navajo Nation Reservation includes about 170,000 people dispersed over 22,537 square miles and was established by treaty in 1868. It is the largest Native American population – a total of roughly 330,000 across the US – and the Reservation is about the size of West Virginia. Living mostly in northeast Arizona, northwestern New Mexico, and a small section of southeastern Utah, far from population centers and power stations, many Navajo are poor and are subject to overlapping political fiefdoms and Byzantine regulatory regimes.

The Nation is governed in part by a tribal council with over 100 chapters, one for every 1,700 citizens. But, except for carve outs that are peculiar to Native American history, state and federal laws also apply.

Historical Setbacks

Before the 1930s, many rural areas across the country lacked electricity. It simply wasn’t profitable for utilities to deliver power to areas across long distances with few customers. The Rural Electrification Act of 1936 changed that for many. The Act provided low-cost federal loans to install electrical distribution systems in isolated rural areas. The loans went through small, rural, electrical cooperatives owned by consumers, many of whom were farmers.

However, Native Americans at the time were not able to take advantage of the Act. They suffered from geographic isolation, marginalization, lack of awareness, lack of support, and limited resources to form cooperatives and secure the necessary loans.

Then in 1966, the Bennet Freeze threw up another significant roadblock to electrification. To force negotiation between the Navajo and Hopi Tribes over a land-ownership dispute, the then commissioner of Indian affairs, Robert Bennet, imposed a development ban on 1.6 million acres of Navajo Nation land claimed by both tribes. The Bennet Freeze prevented development of homes, schools, businesses, roads, and utility infrastructure (water wells excepted). It even disallowed maintenance of structures and infrastructure on contested lands.

The freeze, which virtually froze residents in a state of poverty, lasted 40 years. In 2006, the tribes resolved their differences and approved the Navajo-Hopi Intergovernmental Compact, which ceded most of the land to the Navajo Nation. By that point many homes and ranches had fallen into disrepair and been deserted. In 2009, the federal government offered funding to help revive the area.

 In August 2023, the US Department of Energy (DOE) published an extensive study of tribal electricity access. The report claims progress toward tribal electrification, but acknowledges that DOE investments have had “limited” tangible impacts. The report highlights the potential for development of renewable energy technologies – particularly solar power – to address tribal needs. Other recent research, however, indicates that successful solar projects on Navajo land are infrequent and require demanding preconditions.

Ironically, tribal lands have historically been sources of “traditional” power sources such as uranium and hydrocarbons. While the energy industry has provided employment opportunities for segments of tribal communities, the energy feedstocks have mostly been transferred elsewhere in the country.

The DOE report highlights many barriers to progress. Expense, of course, looms large. According to a study by Sandia National Laboratories, small-scale projects are not economically attractive. On the other hand, large-scale projects require expensive grid connections. Utilities are accustomed to establishing grid connections but are reluctant to invest if returns on capital are unreliable. Lack of basic services creates a Catch 22 for some communities. Some tribal lands lack basic telecommunications services, water and sewer infrastructure, as well as electricity. With little prospect for economic growth in these areas, companies are reluctant to invest in the very services that might make economic development possible.

Making matters more difficult still, tribal lands are often subject to overlapping government authorities. Private companies don’t know which bodies have authority to provide permits and issue regulations. The Bennet Freeze forced the Hopi and the Navajo to resolve their conflicting land claims. But tribal, federal and state regulatory authorities sometimes create their own conflicts. Companies may, for example, have difficulty obtaining rights-of-way for transmission lines on tribal lands. Even when regulatory demands do not explicitly conflict, legal uncertainty and bureaucratic complexity can put off investment.

Federal money for electrification remains insufficient for tribal needs. Though the Biden administration has budgeted billions of dollars to tribal nations, the vast majority of this money was earmarked for “health equity”, public safety, affordable housing, and other initiatives that do not address electrification. The amounts dedicated to tribal energy projects are relatively modest.

Better Planning and New Initiatives

Indian country is not homogenous, and coordination and consensus among the nearly 600 Tribes in the US can be difficult. Some tribal members are moored in tradition and modernize only gradually. As an example, one tribal tradition requires that a house remain empty after the inhabitants die.

One possible solution is an infrastructure bank based on the Canadian model, which might finance projects while respecting Indian sovereignty. The Canada Infrastructure Bank (CIB) launched its Indigenous Equity Initiative in November 2023. The program is designed to help Indigenous communities purchase ownership stakes in infrastructure projects within traditional territories. The program means to serve Indigenous communities that have historically not had access to commercial capital.

The DOE says it committed $75 million to tribal energy projects in 2023. The same report says that, since 2010, the DOE Office of Indian Energy has “invested over $120 million in Native communities across the contiguous 48 states and Alaska.” Those investments average out to $14 million a year to be spent across all the tribal communities in the country. The Office received nearly 690 applications for project funding between 2010 and 2021. The Office had funding to grant only 30% of those applications. The remaining 70%, representing $245 million in requests, went unfunded.

Tribal groups have a hard time getting access to even the modest federal allocations on offer. The DOE itself says, “Complicated Federal application processes and funding gaps limit access by American Indian and Alaska Native communities.” Individual program applications are often hard to complete, and federal funding programs are fragmented across agencies. The DOE also acknowledges that agencies and programs sometimes have inconsistent qualification requirements.

Some tribes have been aggressive about self-help. For example, a Sioux community in North Dakota is building solar farms for itself and hopes to expand efforts to help other tribes. Two Bears, one of the Sioux leaders, claims that the self-governing nature of tribes allows them to develop renewable projects more rapidly than municipalities do. He says, “There’s none of the red tape and legal and policies (sic) that makes these things difficult to do.”

A series of small Navajo projects have come to fruition over the past five years. The projects are collectively called Light Up Navajo and are coordinated between the Navajo Tribal Utility Authority and the American Public Power Association. These projects so far have provided electricity to about 500 homes at a cost of about $40,000 per home.

At that rate, it will take well over 100 years to electrify the entire Navajo Nation.

Looking Abroad for Solutions

It is useful to look at some of the successes in Africa around energy access for precedent. Those challenges have been addressed largely through planning, bringing the number down from 1.2 billion around a decade ago to 300 million people today. There are three broad options that the Navajo Nation could employ: connection to the existing grid for the majority of customers at scale; mini grids that can connect small clusters of households that are hard to connect to the main grid; and finally standalone power supply for isolated households.

Some of these options have been tried or proposed in the Navajo Nation, such as community scale solar projects and 2.5 kW individual solar home electrification projects. Navajo Power is an Indigenous-led, owned and operated clean energy solution helping to solve the Navajo Nation’s century-old electricity crisis through solar power. 

A rigorous planning study would help inform the best strategy to connect households. That starts with a geospatial planning exercise to map out household locations. Multiple connection points from the existing grid may need to be identified. A main transmission trunk line (for example, at 138 kV level double-circuit) could provide the bulk of the power that the 13,000 households collectively need. Lower voltage distribution lines may offload power through a few substations from the 138 kV line. At approximately $0.3-0.4 million per mile for such a line, it may cost about $100 million to construct these lines.

Total investments in transmission and distribution, assuming a population residing within a 20,000- square-mile area, would be approximately $200 million. Spread across 13,000 households, that’s approximately $15,000 per connection – far cheaper than uncoordinated smaller scale efforts, or standalone solar and battery systems.

ABOUT THE AUTHORS

Kristin Ziv, Payne Institute Communications Associate

After receiving a master’s degree in journalism from Northwestern University’s Medill School, Kristin worked as a public relations professional in Chicago.  She has both agency and non-profit experience.  After raising a family, she campaigned for and was elected to public office, serving a term as a Village Trustee in Winnetka, IL, before moving to Colorado in 2019.

Daniel Cardenas, CEO, President, and Chairman of the Board of the American Indian Infrastructure Association and the National Tribal Energy Association

Daniel C. Cardenas Jr., a Hammawi Band of the Pit River Tribe member, resides in Saint Stephens, WY, and Miami, FL, with his six children. A University of California, Berkeley attendee and a River City High School graduate, Daniel was an elected member of the Pit River Tribal Council, representing the Hammawi Band.

Mr. Cardenas holds the position of CEO, President, and Chairman of the Board of the American Indian Infrastructure Association and the National Tribal Energy Association, both advocating for the interests of Native American Tribes across the U.S.

Richard Luarkie, CEO Blue Stone Strategy Partners

Dr. Richard Luarkie is a visionary leader with an impressive track record spanning over two decades in economic and business development leadership roles in Indian Country. Dr. Luarkie previously served as CEO of Tamaya Ventures.

Drawing from his diverse Tribal, public, and private sector experience in business development, strategy, and economic advancement, Dr. Luarkie has honed his skills as a dynamic entrepreneur, a recognized Tribal leader, and strategic thinker. His experience as a competitor analyst and business development executive has provided him the tools to be creative and impactful with business capture strategy, business development, tech transfer and commercialization approaches, and business diversification.

Debabrata Chattopadhyay, Senior Energy Specialist with the World Bank

Debabrata Chattopadhyay is a Senior Energy Specialist with the World Bank where he led the power system planning group from 2014-2022. He has been a Director of Deloitte Australia and a Principal with Charles River Associates between late 2000 and 2012. He was a Senior Lecturer /Associate Professor with University of Canterbury in New Zealand between 1997-2000. Deb holds a Ph.D. in power systems, a master’s degree in development economics, a CFA, and a bachelor’s degree in engineering. His research interests include electricity planning/operation and market design.

Morgan Bazilian, Director, Payne Institute and Professor of Public Policy

Morgan Bazilian is the Director of the Payne Institute and a Professor of public policy at the Colorado School of Mines. Previously, he wD.as lead energy specialist at the World Bank. He has over two decades of experience in the energy sector and is regarded as a leading expert in international affairs, policy and investment. He is a Member of the Council on Foreign Relations.

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DISCLAIMER: The opinions, beliefs, and viewpoints expressed in this article are solely those of the author and do not reflect the opinions, beliefs, viewpoints, or official policies of the Payne Institute or the Colorado School of Mines.