Household energy availability and use on Indian lands⁽¹⁾ is significantly below that of non-Indian households. In fact, sizable Indian populations have no access to electricity at all. This perpetuates a low standard of living, as energy supply and economic well-being are closely linked. Consequently, the Secretary of Energy requested this report to quantify the electricity and renewable energy situations on Indian lands and discuss the potential for using renewable energy there. One goal of the study is to provide a sound basis for Congress to decide how best to appropriate funds to provide Indian households with electricity in an environmentally benign and economically efficient fashion, so that they can advance and enjoy the same prosperity that other Americans do.

The biggest challenge in conducting this study was obtaining the necessary data. While EIA collects extensive data on U.S. energy supply and consumption patterns, only a small amount of information is related to ethnic groups. Since current EIA data have proven inadequate, EIA has turned to older studies (e.g., energy consumption), or has approximated the necessary information (e.g., energy prices).

Chapter 2 discusses Indian household electrification, prices Indians paid for energy compared to the U.S. population as a whole, and other related issues. Here, EIA used the 1990 Decennial Census of Population and Housing and EIA's 1997 Residential Energy Consumption Survey. While these data are slightly dated and based on only representative samples of the population, they recognize ethnicity and thus provide insight unavailable elsewhere. EIA was able to approximate current information on electricity rates for Indian land households from its electric power data surveys.

Renewable resources are an excellent source of clean, sustainable energy. Chapter 3 analyzes the potential for developing these resources to solve the Indians' problems of electrification and self sufficiency (in energy supply), as well as addresses the possible marketing of power on and off Indian lands. Renewable resources for this study include solar, wind, biomass, geothermal, and hydropower.

In order to assess which Indian lands have what renewable resources, a series of composite maps is presented in Chapter 3--one for each energy source except hydroelectric power and an additional one for the electric power transmission grid. Some forms of renewable energy, such as solar/photovoltaic, small wind, geothermal heat pumps, and wood seem to be candidates for use in dispersed applications. Large-scale wind and solar, high-heat geothermal, and biomass are more likely for central station applications. An economic assessment of renewable-based electricity is presented for selected tribal lands having a high incidence of households without electricity and, alternatively, for selected lands with comparatively favorable opportunities for developing central station power to be marketed on and off Indian lands.

To conduct this assessment, certain estimates or data were required for each Indian land:

• The average residential price for electricity in the area, including and surrounding each Indian land. For households off the grid and without electricity, this gives an indication of the price they would pay if connected, in addition to the potential cost of extending the transmission and distribution system.

• The wholesale price of electricity for the area surrounding each Indian land.⁽²⁾ This is used to approximate the revenue the Indians might receive for electricity produced by them and marketed off Indian lands.

• The cost of developing renewable electricity based on historical costs used in the EIA's Energy Modeling System. The lower the costs compared to wholesale prices, the better the prospects are for renewable resource development. Unfortunately, this combination rarely occurs in practice. In the West, where most Indian lands with good renewable resources are located, the wholesale price of electricity is lower than in the rest of the United States,⁽³⁾ thus leading to poor comparative economics for renewable energy.

Chapter 3 also presents an analysis of factors (e.g. project criteria) that influence the economic and technical feasibility of renewable projects. Areas to be assessed include revenue flows, demand planning, indirect costs/benefits, infrastructure, financial condition, and project assessment. The chapter concludes with a discussion of limitations on renewable energy development.

Finally, Chapter 4 presents the results of the study. Appendix A lists DOE-funded Indian Energy Projects from FY1994 through FY1999. The tables in Appendix B detail energy consumption. Appendix C contains information about accessing dynamic maps of renewable resource potential on Indian lands. Appendix D presents a map of North American Electric Reliability Council (NERC) regions. A Glossary is also included.

Endnotes

1. The terms "Indian lands" and "Indian tribal lands" in this report refer to Federally Recognized Indian Reservations in the 48 contiguous States and Tribal Jurisdictional Statistical Areas in Oklahoma. Thus, Federal reservations in Alaska and Hawaii, as well as State Indian lands, are excluded.

2. The historical wholesale price includes the cost of transmission to the intertie.

3. A considerable amount of the electricity sold into Indian lands comes from hydroelectric power sold by the Western Area Power Administration and the Bonneville Power Administration.