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CLEAN Contracts for Indian Country

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“So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America’s electricity will come from clean energy sources.”

With these words in January, President Obama challenged a contentious Congress to transition America to a clean energy economy through a much cleaner electricity grid. There is no more effective way to get back on a competitive footing and turning the nation’s flagging economy around than by rebuilding America’s outmoded infrastructure and developing domestic clean energy resources.

With less than 5% of the U.S. land base, Indian lands hold nearly 10% of America’s conventional energy resources not counting renewables. According to the National Renewable Energy Laboratory, America's 565 federally recognized Indian tribes enjoy a tremendous renewable energy potential estimated in wind and solar power. Realizing just a portion of this potential would have an important impact on tribal economies, and would supply the rest of the country with clean power. It could also reduce energy-related consumption of water and emissions from conventional energy facilities, and protect consumers from the rising fossil fuel costs and polluting emissions.

Many in the U.S. Congress hold that there is little the federal government can do to create jobs, that federal spending must be cut in order to reduce the federal deficit, that renewables should not be singled out for incentives, and that all legislation must be constitutionally grounded. These concerns boil down to two basic issues: authority and costs. While there may be some merit to these positions in the broader economy, they do not hold for Indian country.

The federal government itself holds the key to the clean energy potential on native lands since these resources are locked-up by federal laws and policies. Both Congress and the Executive Branch have broad constitutional and delegated authority, exclusive of the states, to facilitate tribal economic development. Congress has delegated authority by statute to the Executive Branch in many instances, and federal agencies are ideally suited to implement the treaty relationships between tribes and the United States in the area of energy, especially in terms of access, sale and transmission on the federal grids.

Under existing U.S. law, Tribes stand as both preference customers and preference vendors with regard to sale of renewable electricity to the federal power marketing administrations, such as the Bonneville, Tennessee Valley and Western Area power marketing authorities. Legally, there are no impediments for the Administration to start buying tribal renewables today through its power marketing authorities. Innovations such as the Feed-In Tariff or Standard Offer contracts, which are now in effect in the Tennessee Valley for renewables, could be extended to tribal governments across America for power delivered over federally owned and operated transmission systems.

Also, innovative federal policies need not require any new federal spending, as renewable purchases can be rate-based, just as retail, spot market coal purchases are today. A new national report entitled: “CLEAN Contracts: Making Clean Local Energy Accessible Now” describes an innovative policy change called a “CLEAN contract,” modeled somewhat on European standard offer feed-in tariffs. It allows energy project owners to sell their electricity to utilities at a predetermined, fixed price for a predictable and extended period of time. In fact, CLEAN Contracts can save the federal power customers money over the long run by locking in fixed renewable energy prices today and fixing them over the next two decades with long-term contracts, and thus reducing spot market purchases of increasingly more costly fossil fuels. All energy resources are heavily subsidized somewhere in their life cycle, either directly through regulatory policies or through externalizing the true costs into other sectors of the economy, like health or the environment. The fixed price is based on the typical cost for a clean energy project. This is the same way that rates for conventional power projects have historically been set, with an appropriate rate of return (profit) on top of costs.

There are a number of existing federal laws, programs, and Executive Orders to improve energy efficiency, smarten the grids, and reduce the carbon footprint of all federal agencies, and purchase tribal goods and services. In fact, federal agencies are currently reviewing components of an Intertribal Council on Utility Policy plans and feasibility studies for incorporating wind energy and hydropower in the west. Intertribal COUP believes a Federal-Tribal demonstration project with an initial distribution of tribal wind energy in the Upper Great Plains would jumpstart sustainable, economic development.

All of the authority and cost information is available. We need Executive direction to demonstrate that Tribal Nations can provide a meaningful contribution to the provision of 80% Clean Electricity with CLEAN Energy Contracts now, create jobs, and restore our economies on tribal lands across the country.

Bob Gough is Secretary of the Intertribal Council On Utility Policy, which received international recognition with the inaugural World Clean Energy Award for Courage in 2007.