The Inflation Reduction Act Invests in Clean Energy and Climate Resilience for Tribal Nations

Oct 11, 2023

American Indian and Alaska Native peoples are the first and original stewards of the land and waters in the United States. However, many tribal nations are disproportionately impacted by climate change. These impacts include reduced access to traditional foods, decreased water quality, and increased exposure to health and safety hazards. On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. The IRA was created to address the climate crisis and build a more friendly economy for working families, including tribal nations. One of the IRA’s primary focuses is to invest in domestic energy production and reduce carbon emissions by 40 percent by 2030. The IRA has secured $720 million in funds for investing in Indian Country to contribute to programs that tackle the climate crisis and strengthen infrastructure for future generations. 

Tribal communities are often the first affected by climate change. Generations of underinvestment in Indian Country has created substandard infrastructure that is exacerbated when climate disasters arise. Along with underinvestment, research shows that forced migration due to land dispossession by the United States has caused American Indian people, on average, to be more exposed to climate risks and hazards.

The IRA funds a two-step approach to addressing climate change. The first step is to invest in tribal nations' capacity to build up programs that would be most affected in times of a climate disaster. This includes bolstering infrastructure that has historically faced chronic underfunding, including pollution reduction, climate-smart agriculture; and most extensively, access to clean, affordable energy. Many tribal nations are forced to manage energy poverty or “the lack of adequate, affordable, reliable, quality, safe, and environmentally sound energy services to support development”. In fact, in the United States, 14 percent of households on American Indian reservations lack electricity access, compared to 1.4 percent of American households on average

The second part focuses on funding programs supporting climate resilience in tribal nations and Native communities. Many tribal nations in Montana are already actively developing programs to conserve traditional subsistence practices, protect water resources, and diversify energy resources. For example, the Northern Cheyenne Nation, located in southeastern Montana, is working to develop a solution for energy poverty in their community through a solar energy program called the White River Community Solar Project. They are just one nation in Montana working to develop solutions to Montana's rapidly changing climate. And with future investments, like the IRA, tribal nations will continue developing solutions for a better future.

The provisions summarized in this report are specific to Indian Country but are not specific to Montana. To learn more about provisions in this bill that are not tribally specific but that tribal nations can apply for, refer to the IRA tribal guidebook.

Below are funding opportunities created by the IRA that are tribally specific.   

Program: High-Efficiency Electric Home Rebate Program

Section of Bill: 50122

Deadline: Funding available through September 30, 2031

Department: Department of Energy (DOE)

Appropriation: $225 million

Each household can receive up to $14,000 through rebates

Below are the tentative funding allocations per tribal nation in Montana. The DOE has adopted a formula utilizing the data gathered through the Indian Housing Block Grant. This formula considers housing cost burden, households lacking kitchens or plumbing, low-income housing shortages, Tribal households, and the local American Indian population within the Tribe's formula area. The DOE has noted a need for more detailed information on housing conditions based on the available datasets. The DOE was taking public comments on the allocation through September 15, 2023, and has left a point of contact for further information. 

Intended Allocation by Tribal Nation:

Assiniboine & Sioux Tribes of Ft. Peck: $1,068,123

Blackfeet: $1,433,051

Chippewa Cree: $642,286

Confederated Salish and Kootenai Tribes: $1,132,555

Crow Tribe: $741,631

Fort Belknap Indian Community: $552,541

Little Shell: $703,094

Tribal nations can use the High-Efficiency Electric Home Rebate to fund housing upgrades for tribal households directly. If a tribal household earns between 80 and 150 percent of the Area Median Income (AMI), they are eligible for rebates worth half the cost of the energy-efficient upgrades. Tribal households below 80 percent of the AMI are eligible for rebates covering the total cost of the upgrades. Although the program is a rebate, more accurately it provides immediate discounts on a variety of equipment and energy efficiency upgrades, including:

It also includes non-appliance upgrades:

Program: Tribal Energy Loan Guarantee Program

Appropriation: $20 billion in loans 

Deadline: Application on a Rolling Basis

Department: DOE 

Section of Bill: 50145

The Tribal Energy Loan Guarantee Program supports tribal investment in energy-related projects by providing loan guarantees to federally recognized tribal nations, including Tribal Energy Development Organizations that are wholly or substantially owned by a federally recognized Indian Tribe or Alaska Native Corporation. The IRA increased the available loan authority from $2 billion to $20 billion and provided $75 million to carry out the program.

The program supports Tribal energy financing for the development of energy resources like:

Program: Tribal Electrification Program 

Appropriation: $150 Million 

Deadline: Pre-application Due Sept. 18th. Full application due December 22, 2023  

Department: Bureau of Indian Affairs (BIA)

Section of Bill: 80003

This program will provide financial and technical assistance to tribal nations to increase the number of tribal homes with zero-emission electricity. Specifically, the program will:

  1. Provide electricity to unelectrified tribal homes through zero-emissions energy systems.
  2. Transition electrified tribal homes to zero-emissions energy systems.
  3. Support associated home repairs and retrofitting necessary to install the zero-emissions energy systems.

Program: Emergency Drought Relief for Tribes 

Appropriation: $12.5 Million 

Deadline: funds are available until September 30, 2026

Department: Bureau of Reclamations

Section of Bill: 80004

This program will fund near-term drought relief actions to mitigate drought impacts for tribal nations affected by the operation of a Bureau of Reclamation water project, including water shortages, and to mitigate the loss of tribal trust resources.

Program: Tribal Climate Resilience 

Appropriation: $225 million

Deadline: Apply by October 13, 2023

Department: BIA

Section of Bill: 80001 

This program will support climate resilience planning to help sustain tribal ecosystems and natural and cultural resources, economies, infrastructure, human health, and safety. Funding will support habitat restoration and adaptation activities, community-directed relocation, and other activities.

Montana Budget & Policy Center

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