Renewable energy projects are considered particularly appropriate on Indian lands because they are generally environmentally benign and harmonize well with nature, consistent with Indian culture. Accordingly, the Department of Energy (DOE) has provided financial support each year since 1992 for developing renewable energy projects on these lands.(1) In February 1999, Secretary of Energy Bill Richardson revised and extended DOE’s original 1992 Indian lands policy(2) through a $1.8 million solicitation for renewable projects.
A major focus of the current policy is to improve the quality of life on Native American lands through increased access to energy. To this end, the Secretary of Energy directed the Energy Information Administration (EIA) to undertake a study of the cost and availability of electricity to Indian households on Indian lands, as well as the feasibility of using renewable energy there. Because most tribal lands are remote and sparsely populated, they are also considered to be good sites for testing the market potential of dispersed energy sources like renewables.
This report examines electricity use, prices, and renewable energy potential for both Federally Recognized Indian Reservations, and Tribal Jurisdictional Statistical Areas (TJSAs) in Oklahoma.(3) The principal results are:
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Indian households on reservations are disproportionately without electricity. The analysis determined that 14.2 percent of Indian households on reservations had no access to electricity, as compared to only 1.4 percent of all U.S. households.(4)
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Figure ES1. Percentiles of Electricity Costs Relative to Total Household Income, for Households that Pay for Electricity, 1990 
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According to EIA’s Residential Energy Consumption Survey (RECS), electricity prices paid by Indian households in 1997 (8.7 cents per kWh) were not statistically different from prices paid by U.S. households as a whole (8.1 cents per kilowatthour (kWh). However, Indians living on Indian lands generally pay a greater portion of their income for electricity (Figure ES1). Regional data on electricity prices for Indian households in 1998 were also estimated from an EIA survey of U.S. electric utilities (Table ES1). Ninety-two percent of the 175,000 Indian households on Indian lands are located in just four of the North American Electric Reliability Council subregions. Electric utilities servicing counties containing Indian lands in three of those four subregions have higher rates than all utilities with residential customers in the subregion. From these data, it is impossible to determine whether the higher costs are due to the cost of service for sparsely populated rural areas, including Indian lands or other factors.
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Table ES1. 1998 Residential Average Revenue per Kilowatthour (1998 cents/kWh) NERC Region Average for All U.S. Households NERC Subregion All Households Average Average for Indians on Indian Lands a Percent of Indian Households ECAR ECAR 7.7 8.5 0.2 ERCOT ERCOT 7.8 -- -- MAAC MAAC 10.1 -- -- MAIN EM 7.2 -- -- MAIN NI 10.6 -- -- MAIN SCI 8.8 -- -- MAIN WUM 7.2 7.8 1.6 MAPP MAPP 7.4 7.8 11.1 NCPP NEPX 11.6 13.2 0.3 NCPP NYPP 13.6 12.8 1.2 SERC FL 8.0 8.4 0.3 SERC SOC 7.4 6.9 0.5 SERC TVA 6.4 SERC VACAR 7.9 8.4 1.1 SPP N 7.3 9.2 0.2 SPP SE 7.3 6.8 0.1 SPP WC 6.4 7.1 38.0 WSCC AZN 8.9 8.2 31.2 WSCC CNV 10.3 10.6 2.1 WSCC NWP 5.6 6.3 11.7 WSCC RMPA 7.4 8.1 0.4 aNote that 92 percent of the Indian population living on Indian land is in 4 regions: MAPP, SPP/WC, WSCC/AZN, and WSCC/NWP.
NERC = North American Electric Reliability Council. See Appendix D for map of NERC regions.
Source: Energy Information Administration, 1998 Form EIA-861, "Annual Electric Utility Report," and EIA estimates as documented in this report.
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Some Indian lands appear to have potential for renewable energy development. Sixty-one reservations/TJSAs, having 50 percent of the Indian population on Indian lands, appear to have renewable resources that might be developed for central station generation for a levelized cost of less than 2 cents per kilowatthour (kWh) above regional wholesale prices (Table ES2). These premiums exclude any transmission costs required to connect the plant to the regional transmission grid.(5) Biomass energy on the Eastern Cherokee reservation in western North Carolina has the lowest incremental cost of all fuels on Indian lands examined, at just 0.1 cents per kWh more than the wholesale price of electricity. On the same reservation, wind power is projected to cost only 0.4 cents per kWh more. In general, biomass provides the greatest potential for relatively inexpensive renewable-based central station power on 52 of the 61 reservations distributed widely across the United States. By contrast, all of the Indian lands where wind has the lowest renewable cost premium are located in New Mexico. The premium for wind electricity on New Mexico reservations is 1.8 cents per kWh.
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Table ES2. Indian Lands With Highest Potential for Central Station Developmenta Indian Land State Abbreviation 1990 Indian Occupied Housing Units Wholesale Price (98c/kWh) Minimum Renewable Premium (98c/kWh) Renewable Fuel Eastern Cherokee Reservation NC 1,786 4.3 0.1 Biomass Eastern Cherokee Reservation NC 1,786 4.3 0.4 Wind Alabama and Coushatta Reservation TX 143 4.1 0.7 Biomass Coushatta Reservation LA 12 4.1 0.7 Biomass Mississippi Choctaw Reservation MS 830 3.7 0.7 Biomass Poarch Creek Reservation AL 66 3.7 0.7 Biomass Iowa Reservation KS--NE 33 3.1 1.6 Biomass Kickapoo Reservation KS 100 3.1 1.6 Biomass Sac and Fox (KS-NE) Reservation KS--NE 16 3.1 1.6 Biomass Hannahville Community MI 37 2.9 1.7 Biomass Lac du Flambeau Reservation WI 428 2.9 1.7 Biomass L'Anse Reservation MI 257 2.9 1.7 Biomass Menominee Reservation WI 824 2.9 1.7 Biomass Oneida (West) Reservation WI 707 2.9 1.7 Biomass Potawatomi (Wisconsin) Reservation WI 71 2.9 1.7 Biomass Sokaogon Chippewa Community WI 62 2.9 1.7 Biomass Stockbridge Reservation WI 156 2.9 1.7 Biomass Wisconsin Winnebago Reservation WI 118 2.9 1.7 Biomass Lac Vieux Desert Reservation MI 37 2.9 1.7 Biomass Cherokee TJSA OK 20,308 3.0 1.8 Biomass Choctaw TJSA OK 9,080 3.0 1.8 Biomass Kiowa-Comanche-Apache-Fort Sill Apache TJSA OK 3,511 3.0 1.8 Biomass Fort Apache Reservation AZ 2,232 3.4 1.8 Biomass Navajo Reservation AZ--NM--U 29,375 3.4 1.8 Biomass Isleta Pueblo NM 831 3.4 1.8 Wind Jemez Pueblo NM 402 3.4 1.8 Wind Jicarilla Apache Reservation NM 607 3.4 1.8 Wind Mescalero Apache Reservation NM 595 3.4 1.8 Wind Nambe Pueblo NM 118 3.4 1.8 Wind Picuris Pueblo NM 48 3.4 1.8 Wind Taos Pueblo NM 422 3.4 1.8 Wind Tesuque Pueblo NM 60 3.4 1.8 Wind ZIA Pueblo NM 143 3.4 1.8 Wind Bay Mills Reservation MI 104 2.9 1.8 Biomass Isabella Reservation MI 209 2.9 1.8 Biomass Sault Ste. Marie Reservation MI 77 2.9 1.8 Biomass Bois Forte (Nett Lake) Reservation MN 106 2.7 1.9 Biomass Deer Creek Reservation MN 1 2.7 1.9 Biomass Fond du Lac Reservation MN 342 2.7 1.9 Biomass Grand Portage Reservation MN 87 2.7 1.9 Biomass Leech Lake Reservation MN 999 2.7 1.9 Biomass Mille Lacs Reservation MN 119 2.7 1.9 Biomass Prairie Island Community MN 20 2.7 1.9 Biomass Red Lake Reservation MN 928 2.7 1.9 Biomass Vermillion Lake Reservation MN 27 2.7 1.9 Biomass White Earth Reservation MN 816 2.7 1.9 Biomass Omaha Reservation IA--NE 429 2.7 1.9 Biomass Sac and Fox (Iowa) Reservation IA 135 2.7 1.9 Biomass Bad River Reservation WI 285 2.7 1.9 Biomass Crow Creek Reservation SD 352 2.7 1.9 Biomass Devils Lake Sioux Reservation ND 627 2.7 1.9 Biomass Flandreau Reservation SD 78 2.7 1.9 Biomass Fort Berthold Reservation ND 848 2.7 1.9 Biomass Lac Courte Oreilles Reservation WI 523 2.7 1.9 Biomass Lake Traverse (Sisseton) Reservation ND--SD 739 2.7 1.9 Biomass Lower Brule Reservation SD 237 2.7 1.9 Biomass Biomass Red Cliff Reservation WI 216 2.7 1.9 Biomass St. Croix Reservation WI 138 2.7 1.9 Biomass Santee Reservation NE 140 2.7 1.9 Biomass Turtle Mountain Reservation ND--SD 1,452 2.7 1.9 Biomass Winnebago Reservation NE 311 2.7 1.9 Biomass Yankton Reservation SD 490 2.7 1.9 Biomass a Excludes Trust Lands.
Notes: The wholesale price is the 1998 average revenue for sales for resale (including firm and non-firm) and the transmission cost to the intertie.
Source: EIA estimates as documented in this report.
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The Indian lands with the greatest need for electrification are generally in Arizona. On the Navajo Reservation(6), almost 37 percent of all households do not have access to electricity (Table ES3). This occurs despite the fact that there is an indigenous supply of coal and a large power generation station with major transmission lines on this reservation. Moreover, the Navajo Reservation accounts for 75 percent of all Indian households on tribal lands not having electricity. Other Arizona reservations with high rates of non-electric households include: Hopi Reservation (29 percent), Salt River Reservation (12 percent), and Fort Apache Reservation (9 percent). In the Dakotas, the Standing Rock Reservation also has a very high rate of households without electricity, 18 percent.
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Table ES3. Renewable Options for Indian Lands with High Incidences of Indian Households Without Electricity a Indian Land 1990 Indian Occupied Housing Units Percent Without Electricity State Policies Navajo Reservation 29,375 36.8 Y Hopi Reservation 1,724 28.6 Y Standing Rock Reservation 1,133 18.2 N Mescalero Apache Reservation 595 15.2 Y Salt River Reservation 855 11.9 Y Fort Apache Reservation 2,232 9.3 Y Papago Reservation 2,086 7.8 Y Lake Traverse (Sisseton) Reservation 739 7.8 N Gila River Reservation 2,295 7.6 Y Turtle Mountain Reservation 1,452 5.9 N Pine Ridge Reservation 2,215 5.8 N San Carlos Reservation 1,634 5.7 Y Fort Belknap Reservation 656 5.5 Y Rosebud Reservation 1,656 5.1 N Iowa TJSA 64 4.9 N Jicarilla Apache Reservation 607 4.7 Y Fort Berthold Reservation 848 4.6 N Wind River Reservation 1,474 3.9 N Leech Lake Reservation 999 3.5 Y Pascua Yaqui Reservation 525 3.0 Y Cheyenne River Reservation 1,293 3.0 N Otoe-Missouria TJSA 130 2.9 N Lac Courte Oreilles Reservation 523 2.8 N Zuni Pueblo 1,465 2.7 Y Flathead Reservation 1,732 2.1 Y Colorado River Reservation 652 2.0 Y Fort Hall Reservation 832 1.9 N White Earth Reservation 816 1.9 Y Acoma Pueblo 586 1.9 Y Northern Cheyenne Reservation 880 1.7 Y Nez Perce Reservation 581 1.7 N Fort Peck Reservation 1,591 1.7 Y Mississippi Choctaw Reservation 830 1.6 N Devils Lake Sioux Reservation 627 1.6 N aExcludes Trust Lands.
Source: EIA estimates as documented in this report.
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Photovoltaic (PV) rooftop modules may be a feasible way to provide limited electric service (without backup power) to large numbers of households on the Navajo Reservation, and possibly others. The levelized cost for distributed PV generation ranges from 28.0 to 51.6 cents per kWh. While substantially higher than the average residential price of electricity, the Navajo Reservation has many households extremely remote from transmission/distribution lines. This raises distribution costs to a level far higher than average. DOE’s National Center for Photovoltaics indicates that a distance from the nearest utility line of only a quarter mile raises distribution costs sufficiently to make PVs cost-effective at 25 to 50 cents per kWh. In addition, if the cost of the PV system can be paid for through a 30-year home mortgage, its levelized cost can be reduced to 15 to 20 cents per kWh. These estimates exclude the cost of back-up power or energy storage, which could raise the cost of full-service PV rooftop-based electricity by a factor of 3 or 4.
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Biomass central station projects on the Navajo Reservation in Arizona and wind projects on the Mescalero Apache Reservation in New Mexico might also offer potential renewable resources to electrify Indian households. Those reservations have the highest and fourth-highest rates of households without electricity, 37 and 15 percent, respectively. Relatively high rates of non-electrification, however, call into question whether the necessary distribution systems are in place to provide grid-connected power to these households.
TJSAs in Oklahoma are generally characterized by high rates of electrification—the same as the Oklahoma population at large—modest renewable energy resources, and moderate electricity rates. Indians living on TJSAs in Oklahoma pay electricity rates comparable to those paid by other citizens. However, central station biomass may have a potential market there. It has a premium of only 1.8 cents per kWh over the wholesale price of electricity on the Cherokee, Choctaw, and Kiowa tribal lands.
Some of the least costly renewable applications described in this report might generate a positive cash flow for Indian lands if the power were sold into the wholesale electricity market. Several State and Federal incentives exist or have been proposed for renwable power, such as a payment of 1.2 cents per kWh from the Energy Policy Act’s (EPACT) Renewable Energy Production Incentive (REPI) program.(7) These incentives could further increase the feasibility of renewable energy projects on Indian lands. In addition, if the Administration's proposed electricity restructuring legislation were enacted,(8) renewable energy projects on Indian tribal lands would be awarded double credits in the Renewable Portfolio Standard credit trading program.
In evaluating the above information, it is critical to note that renewable energy project feasibility tends to be highly site- and project-specific. Therefore, the feasibility of projects at any location, such as those mentioned above, are highly dependent upon numerous local factors (e.g., land use, terrain, electricity infrastructure, actual electric rates paid).
Endnotes
1. See website http://www.doe.gov/news/releases99/febpr/pr99022.htm for a discussion of the revised Indian energy policy and Appendix A.
2. The Department of Energy (DOE) first developed a policy governing its work with American Indians in 1992. Among other things, the policy stated that, “The Department will identify and seek to remove impediments to working directly and effectively with tribal governments on DOE programs.” Further, the policy committed DOE to consider Indian cultural issues in all of its programs.
3. The term “Indian lands” is used to denote Federally Recognized Indian Reservations and TJSAs together.
4. Although the 1990 Decennial Census source data allows for the possibility that households incurred no electricity cost simply because electricity was provided by some other payer, subsequent contacts with Indian affairs experts demonstrated this is not the case.
5. The cost premiums also assume there is an existing transmission and distribution system infrastructure for these reservations to use the power themselves. Otherwise marketing power to off-reservation customers is likely to be the only feasible option, as costs for new distribution systems to sparsely arrayed reservation households would be quite high.
6. That is, the Navajo Reservation and Trust Lands, located primarily in Arizona but also in New Mexico and Utah.
7. This is a levelized
cost. The actual REPI incentive is 1.5 cents per kWh.
8. The Administration’s
“Comprehensive Electricity Competition Plan” proposal, submitted
September 17, 1999, is available on the internet at: http://home.doe.gov/policy/ceca.htm.