(From Todd Epp, Northern Plains News)
Tribal leaders across South Dakota and the Northern Plains face mounting barriers to developing energy projects despite billions in potential federal support, according to a new Government Accountability Office report.
The GAO found that the Department of Energy’s Tribal Energy Financing Program (TEFP) has closed only one loan guarantee since it began in 2018, leaving more than half of applications inactive.
Energy potential on S.D. tribal lands
The audit noted that 86 percent of tribal lands with energy potential remain undeveloped. South Dakota’s nine tribal nations, along with dozens of tribes in North Dakota, Montana, and Nebraska, hold large wind and solar resources that could power communities and generate revenue.
GAO said new projects could help lower household power costs, strengthen tribal government programs, and reduce poverty. The report pointed to stalled applications ranging from small solar farms to billion-dollar ammonia production facilities for low-carbon fuel.
Barriers for tribes
Investigators said tribal applicants face steep upfront development costs, unpredictable legal and due diligence fees, and long, confusing reviews. Some projects spent more than two years in DOE’s intake process before collapsing.
One applicant told auditors that tribes may need $10 million to $30 million just to make a project “shovel ready.” Another tribe said DOE-approved contractors lacked knowledge of tribal law, forcing applicants to pay higher legal bills.
DOE requires tribes to hire outside legal, financial, and engineering experts. Those costs can run into the millions, discouraging many communities from even applying.
Northern Plains impact
Tribal leaders in the Dakotas and Montana have long sought renewable energy projects to replace unreliable diesel generators and aging transmission lines. Wind projects in South Dakota’s Cheyenne River and Standing Rock reservations and solar farms in North Dakota have been proposed but remain on hold.
The GAO report said delays often cost tribes key partners. One applicant lost both its power purchaser and a multimillion-dollar bridge loan during DOE’s protracted review, forcing the project to collapse.
DOE response
DOE’s Loan Programs Office acknowledged the problems and told GAO it is testing a new “public finance application pathway” to reduce costs and timelines. The office also pledged more staff training on tribal law and clearer written guidance.
But GAO warned that recent federal hiring freezes and cuts to Inflation Reduction Act funding have left the program understaffed and underfunded. As of July, DOE had 43 vacant positions and more than 100 employees on deferred resignation.
Recommendations
GAO recommended that DOE:
– Identify and share federal funding to help tribes prepare projects.
– Revise its due diligence process to reduce or waive fees.
– Streamline applications, clarify guidance, and keep staff dedicated to tribal projects.
DOE agreed with all five recommendations.
The bottom line
South Dakota’s tribal nations and others in the Northern Plains stand to gain from vast untapped energy potential. But unless DOE reduces barriers, GAO said, most projects will remain on the shelf while rural communities wait for lower bills, reliable power, and new jobs.
