▶ 0:27:05>> the committee will come to order. We are considering the nomination of william kirkland to serve as assistant secretary for indian affairs at department of the interior. The job of assistant secretary is probably the most consequential for native people at interior as it is charged with assisting the secretary in carrying out federal trust responsibilities, administrating laws, rules, to tribes, trust affairs, euros, offices and programs.
▶ 0:27:36Mr. kirkland was nominated by Mr. trump to this position on february 3. Committee members were given an opportunity to review his nomination paperwork, which was received may 30, including the financial disclosure report, ethics agreement to avoid conflict of interest, and the opinion letter that indicates he is in compliance with conflict of interest laws and regulations that will apply to his position. Our committee questionnaire completed by Mr. kirkland and received on june 16.
▶ 0:28:09July 17 the committee held a hearing on the nomination and Mr. kirkland responded to questions on august 29. His nomination has broad support from tribes and organizations. In receipt of 48 letters expressing support. The committee received no letters in opposition to Mr. kirkland's nomination. Mr.
▶ 0:28:29Kirkland may be an unconventional choice for this position as he is not a legal scholar steeped in federal indian law or a tribal leader, but has expressed eagerness to advance indian country's priorities with the white house. Mr. kirkland has worked in the trump white house before in external affairs, has worked in state government and managed political campaigns. He has connections and relations of within this administration to help us get things done.
▶ 0:28:55I will hold him to his word that he will use these connections and relationships on behalf of tribes and native communities to make a positive difference in their lives. At his nomination hearing Mr. kirkland committed to take 90 days and listen to native people to learn what is important to them and develop an action plan to address those issues. He committed to surround himself with good people to carry out the plan and all the work more broadly that comes with the job.
▶ 0:29:22We have to give him a chance to do this job so I will be supporting Mr. kirkland's nomination today and would urge my colleagues to do the same. We need Mr. kirkland swiftly confirm so this -- so he can get going on the important work. I now turn to the vice chairman for comments he may have. >> thank you, chair murkowski. If confirmed Mr.
▶ 0:29:46Kirkland will have the solemn responsibility of fulfilling the federal government's trust and treaty obligations to, and maintaining government to government relationship with indian tribes. Not just within the department of interior, but across the entire administration. At his nomination hearing I asked Mr.
▶ 0:30:04Kirkland several questions related to qualifications and preparedness to act as a fiduciary in the best interest of american indians and alaskan natives and respect the federal government trust relationship with the native hawaiian community and submitted russians for the record further probing his answers to the committee questionnaire and supporting materials and reviewed his answers to those questions. He did not answer many of those questions.
▶ 0:30:33Some of his answers are noteworthy. I will highlight four of his commitments. First he committed to learn from and work with indian affairs subject matter experts at the department and on this committee . Second he assured us his partisan background will not color the bipartisan nature of his work. To uphold this trust responsibly , third he acknowledged his duty to comply with all ethics laws and agency guidance, including those related to his political campaign work.
▶ 0:31:06Fourth, he promised to treat all tribes equally, no matter if they have a treaty with the U.S., who they voted for for president and how and when they were federally recognized, in accordance with the law. I will hold him to these commitments and they should inform how the committee members vote today. Thank you, chair.
▶ 0:31:24Chair Murkowski: Thank you, senator schatz. We have a quorum present. I call up agenda item one, the nomination of william kirkland to be assistant secretary for indian affairs at the department of the interior. Is there objection? Hearing on the committee will roll call a vote to report the nomination of william kirkland to the senate. Clerk will call the roll.
▶ 0:31:48Chair Murkowski: Aye.
▶ 0:31:51Sen. Hoeven: Aye.
▶ 0:31:53Sen. Daines: Aye.
▶ 0:31:57Sen. Rounds: Aye.
▶ 0:31:59Sen. Moran: Aye.
▶ 0:32:01Sen. Schatz: Aye. [indiscernible] [indiscernible] >> no by proxy.
▶ 0:32:19Sen. Smith: [indiscernible] >> Mr. luján? >> no by proxy. >> on this boat the yay -- the on this vote the yayas are 7,
▶ 0:32:50Sen. Smith: Noes are 4.
▶ 0:32:53Chair Murkowski: Do any members choose to make a statement with regard to the nomination of Mr. kirkland? Seeing none, no further business before the committee. This meeting is adjourned and we will turn to our oversight hearing.
▶ 0:33:27Chair Murkowski: We invite the witnesses to come forward. I now call this oversight hearing to order.
▶ 0:33:46Chair Murkowski: At today's hearing we will learn more about the department of energy's tribal energy programs, both its office of indian energy and the loan program offices tribal energy financing program and how these programs are working, and what can be improved to better serve tribes in their efforts to unleash energy resources. We will also hear from the denial he commission about its work in partnership with doe in promoting energy infrastructure in rural alaskan communities.
▶ 0:34:16Chair Murkowski: Tribes were historically left out of national efforts and still today face lower rates of electricity access and higher energy cost burdens than other communities in america. The office of indian energy policy and programs at the department of energy is helping fill these gaps by providing technical and financial assistance to tribes across the country.
▶ 0:34:37Chair Murkowski: In alaska for example the office of indian energy policy help fund the installation of two hydro kinetic devices on a river, and energy storage technology. The devices were designed to not disturb the sockeye salmon there which residents rely upon for his subsistence. The devices augment their diesel fuel community, saving the community nearly $170,000 a year which is a lot for a small community.
▶ 0:35:08Chair Murkowski: This is not a one-off example. There are tribally let opportunities for development in sustainability across indian country and alaska. While tribal lands only account for 2% of all lands in the country, they contain an estimated 50% of potential uranium reserves, 30% of coal reserves west of the mississippi, 20% of known oil and gas reserves, and 6.5% of all utilities and renewable energy resources.
▶ 0:35:37Chair Murkowski: As more tribes jump into the energy space and look to build resilience to their existing energy systems, lower costs and generate revenue to boost the tribal economy and fund social services, they often need greater amounts of capital and unfortunately we know complexities due to permitting, land jurisdiction and ownership and unfamiliarity of banking with lending to tribes means tribes are often at a disadvantage when developing their own resources and connecting their communities to the grid.
▶ 0:36:09Chair Murkowski: 86% of tribal lands with energy potential or undeveloped. This I think is unacceptable. In congress we worked on a bipartisan basis to try to provide avenues for tribal capital access and yet as thegao has found in their finance report, one of those avenues at doe is not working.
▶ 0:36:31Chair Murkowski: Meant to enable tribal access to loans, doe's loan program office has successfully closed only one loan guarantees since the solicitation was first issued in 2018. You will hear that repeated throughout today's oversight. Since 2018 only one loan guarantee has been closed. No loans.
▶ 0:36:55Chair Murkowski: We have talked about this before and both congress and deal we have taken multiple steps to improve the program, but these have not gone far enough. I look forward to hearing from gao on the recommendations, particularly potential for a public financing pathway. Such a change could improve pope book -- program implementation by allowing doe to treat tribes as the governments they are rather than large-scale utilities or private equity groups that receive other kinds of loans.
▶ 0:37:24Chair Murkowski: Maybe then we would see existing $20 billion in loan authority that exists utilized to get projects done. The insights and feedback we garner here today will help us as we work to ensure tribes are poised to take advantage of resources, build more resilient cost-effective energy systems, and benefit from and contribute to this administration's focus on unleashing american energy.
▶ 0:37:50Chair Murkowski: Our hearing record is open for two weeks and we welcome feedback from tribes, tribal energy organizations on these topics. I turned to the vice chair for his opening statement.
▶ 0:38:12Vice-Chair Schatz: Thank you chair murkowski. Congress made historic investments in the tribal energy future and its ability to determine the future for itself whether through renewable or nonrenewable resources. We authorized half a billion to native communities for energy needs and made them eligible for billions more. Our goal to set up native communities on a new path to energy security regardless of the type of energy.
▶ 0:38:42Vice-Chair Schatz: Until recently we saw dividends on those investments. The tribal energy loan program issued its first successful loan after the ira increased the loan guarantee amount from 2 billion dollars to $20 billion in authorized $75 billion for energy projects. We also acted so tribes could receive doe funds for energy needs in ways that work for them and empower energy sovereignty.
▶ 0:39:09Vice-Chair Schatz: Congress listened to native communities and invested in development potential putting them in the driver seat. We made progress, but now there are efforts to undo that progress. The one big beautiful bill act is a case in point. More than 100 tribes wrote about the importance of the tribal energy loan guarantee program and ira tax credits, urging congress not to reverse course.
▶ 0:39:33Vice-Chair Schatz: But over the objection of native communities and their industry partners, the one big beautiful bill rescinded millions in funding for the doe's tribal energy loan guarantee program and raised energy costs by terminating tax credits that could account for 70% of project costs for tribes and their energy partners.
▶ 0:39:52Vice-Chair Schatz: On top of this trump is directing agencies to cancel and delay renewable energy projects only, and proposed cuts to staff will exacerbate brain drain from thousands of employees who have already left, to thousands more who may be subject to doe's plan.
▶ 0:40:11Vice-Chair Schatz: This historic loss of staff and resources creates risk for tribes whose energy goals cannot be met without federal dollars, and expertise of agency staff who make tribal energy projects a reality. Last congress we started to move past the status quo, but now it feels like we are not even returning to the old mark, but going past it. I want to better understand what is happening at doe so we can continue working in a bipartisan way to hold the federal government accountable to indian country's energy needs.
▶ 0:40:42Vice-Chair Schatz: I look forward to the testimony from today's panel and thank you for coming to testify.
▶ 0:40:46Chair Murkowski: Thank you, vice chair schatz. We will turn to witnesses. We have today Mr. david conrad, the acting director and deputy director that the U.S. department of energy office of indian energy policy and programs. He will be followed by Dr. anna maria ortiz, the director at the government accountability office, gao, and natural resources and environment division.
▶ 0:41:16Chair Murkowski: We have the opportunity today to have back before the committee Ms. jocelyn fenton, the director programs at the generally commission. Thank you for -- at the denali commission. Thank you for making the long trip from alaska. We do have your full written testimony. It will be part of the official record.
▶ 0:41:40Chair Murkowski: We ask you keep your oral comments tomorrow -- to no more than five minutes so we have time for questions. Mr. conrad, if you would begin with your testimony.
▶ 0:41:51Mr. Conrad: Good afternoon chair murkowski, vice chair schatz, and members of the committee. Thank you for the opportunity to speak about unleashing tribal energy. My name is david conrad, a citizen of the osage nation, deputy and acting director for the permit of energy's office of indian energy. I began with resource tribes in 1991, and have centered on tribal energy ever since.
▶ 0:42:20Mr. Conrad: I worked in intergovernmental relations and energy government within tribal and federal government. These experiences have given me an understanding of the tribal energy sector's complexities and transformative dental for tribal nations. 20 years ago this committee championed the indian tribal energy development and self-determination act, a vital part of the energy act of 2005 establishing the office of indian energy within the department of energy.
▶ 0:42:48Mr. Conrad: Title 5 charged our office with lowering costs for tribes, developing indian energy, addressing gaps in noxious city access in indian country and also directed us to carry out our programs in accordance with principles of self-determination. Congress told us to trust tribes to know what is best for their citizens as they produce -- pursue energy projects.
▶ 0:43:13Mr. Conrad: Over the last 20 years the office of indian energy policy fulfilled our congressional mandate and supported over 240 tribal energy projects, delivered reliable energy to over 1100 buildings and homes and fulfilled over 500 requests for technical assistance giving tribes access expertise at our national labs to carry out strategic energy planning, analyze the potential of their energy resource and chart a course to achieve energy
▶ 0:43:44Mr. Conrad: Visions. I'm privileged to lead this during another pivotal moment as we work to unleash tribal energies. Under the leadership of president trump and secretary wright, our vital work continues with a key addition. We are strengthening our commitment to ensure tribes share in the prosperity of american energy dominance, securing access to affordable, reliable energy also remains central to our mission and congressional charge. Tribes possess extensive energy resources.
▶ 0:44:12Mr. Conrad: Our new additional focus will help ensure we are poised to capture a greater share of energy value chain. While resource ownership offers its own opportunities, tribes increasingly want to develop their own energy resources using their own expertise and workforces. The office of indian energy policy is working to support tribes to implement their vision.
▶ 0:44:34Mr. Conrad: In march we partnered with the department of commerce to extend the commercial law program to support tribes in advancing high-energy projects like data centers, critical minerals, and transmission infrastructure. The program is already serving multiple tribal partners to enhance commerce to thrive in their communities.
▶ 0:44:56Mr. Conrad: Additionally in collaboration with the department's energy innovator fellowship program, 11 new fellows have been placed a tribal host institutions this year. The largest number of fellows or tribal host of any cohort to date. They work with tribes to modernize power systems and infrastructure, and contribute to a more reliable and affordable power system. Finally we expanded the navigator service with dedicated staff.
▶ 0:45:28Mr. Conrad: This response inquiries from tribes, developing energy projects and facilitates efficient access to doe programs and other federal energy programs available to them. Building on the foundation from this committee 20 years ago, we continue to foster the trust and predictability for indian country to unleash their own energy.
▶ 0:45:54Mr. Conrad: Tribes are proving american indian alaskan native livelihoods flourish most when tribes direct their own energy development. The office of indian energy maximizes the impact of federal impacts in the sector and we look forward to continuing this essential work and I'm happy to answer questions.
▶ 0:46:15Chair Murkowski: Thank you, Mr. conrad. Next return to Dr. ortiz. Welcome.
▶ 0:46:23Dr. Ortiz: Thank you, chair murkowski, vice chair schatz, members of the committee, thank you for having me today. My name is anna maria ortiz. I have the honor of overseeing gao's portfolio in tribal and native american issues. I'm happy to discuss a recent report on the tribal energy program.
▶ 0:46:48Dr. Ortiz: Unleashing potential energy resources throughout indian country could greatly increase access to reliable and affordable electricity, contributor tribal economic development, and help address the nation's energy production needs. The department of energy's tribal energy finance program, run by the loan program office, exist to help tribes and tribal advocates with access to private capital to invest in their own lands and resources.
▶ 0:47:17Dr. Ortiz: The program is technology neutral and has the authority to offer up to $20 billion in direct loans and loan guarantees. Additionally the project -- the program focuses on tribal ownership of projects, allowing even small tribes a chance to participate.
▶ 0:47:37Dr. Ortiz: These futures offer tribes with different resources, flexibility to determine their own approaches to effective energy development consistent with the principle of tribal sovereignty. Despite these benefits gao found that lpo administered the tribal energy finance program in ways that make it nearly impossible for applicants to successfully navigate the loan process.
▶ 0:48:07Dr. Ortiz: Design features have deterred many potential applicants and have delayed and lengthen the process for others. For example, lpo places the burden of due diligence, the underwriting process for the loan or loan guaranty, on the backs of tribal applicants, obligating them to commit unknown amounts of money to pay for contracted legal and technical experts, some of whom lack sufficient expertise in tribal energy development.
▶ 0:48:36Dr. Ortiz: This puts the tribe on the hook for these consultants' learning curves and potentially millions of dollars of roll. -- overall. If applicants are not deterred, they confront lengthy application review processes, inconsistent and conflicting program guidance, and limited in changing lpo staff, many of whom lack appropriate training and experience.
▶ 0:49:02Dr. Ortiz: For example one applicant spent nearly two years in the review process, responding to varied and redundant requests for information from different lpo staff before a key development partner pulled out, effectively jettisoning the project.
▶ 0:49:17Dr. Ortiz: Since the tribal energy finance program first solicited applications in 2018, lpo has only completed one partial loan guarantee it as of july 2025, 12 other applications had been rejected withdrawn, or paused. Of the seven remaining active applications, four have been under review for more than two years.
▶ 0:49:42Dr. Ortiz: The tribal energy finance program is a poignant example of what happens when tribal programs are designed and administered without regard to tribal needs. By modeling its application review process on a different program designed primarily for large projects and untested technologies, the department of energy inadvertently curtailed its ability to effectively serve tribal applicants.
▶ 0:50:10Dr. Ortiz: Gao recommended, and the department of energy agreed, that lpo reviews and revise elements, review and document consistent guidance for applicants, and designated dedicated staff with tribal expertise to support the program. Gao's recommendations aimed to remove unnecessarily complex and lengthy processes imposed by lpo to unleash the program to its full potential.
▶ 0:50:41Dr. Ortiz: Thank you. This concludes my oral statement. I welcome any questions.
▶ 0:50:46Chair Murkowski: Thank you, Dr. ortiz. Ms. fenton, welcome back to the committee.
▶ 0:50:52Ms. Fenton: Hello, madam chair, vice chairman schatz and members of the committee. Thank you for your leadership and dedication to it it -- to advancing energy security for rural and tribal communities in alaska and throughout the native community. My name is jocelyn fenton, director of programs at the denali commission and in pleased to present the insights and experience of our partners and the alaskans we serve.
▶ 0:51:17Ms. Fenton: The denali commission was crated by congress in 1998 to address critical infrastructure and develop needs in rural alaska. For more than 25 years, the commission has served as a federal partner for 200 isolated villages, each home to a federally recognized tribe. These villages average fewer than 500 residents, are accessible only by plane or boat, and face some of the most extreme environments of conditions in the U.S.
▶ 0:51:46Ms. Fenton: Life in these villages depends on a fragile but vital infrastructure system. Small diesel powerhouses, bulk fuel tank farms and water systems. Tank farms store diesel and gasoline required for electric it gender -- generation, but also fueling homes, snow machines, running schools, clinics and water plants. Without safe reliable fuel storage the entire community is at risk. Unfortunately most of the infrastructure is aging and deteriorating.
▶ 0:52:17Ms. Fenton: The alaska energy authority, the state's energy arm, estimates over $1 billion needed to bring rural tank farms to save, code compliant condition with another $400 million to upgrade powerhouses. Less than half of been upgraded and those are aging out of their service life. Some communities used tanks older than 70 years. The consequences of failure or severe.
▶ 0:52:45Ms. Fenton: In rural alaska when the power goes out it is not just the lights. Freezers holding foods collected over the summer and fall fall, water systems freeze and burst and health emergencies follow. Energy security is community survival. The costs are staggering. Rural household spent 27% of their income on energy, nearly four times what urban households spent. Electricity in some villages cost more than $1 per kilowatt hour compared to the national average of 16 cents.
▶ 0:53:18Ms. Fenton: Every other part of life like groceries, transportation, housing is more expensive as a result. Investment in bulk fuel storage are some of the most effective strategies to reduce these costs. A 2017 study found up rating tank farm saved communities more than two dollars per gallon and fuel costs yet despite these proven benefits it has not kept pace with the growing backlog of needs. This is were partnerships, especially with the doe, make a real difference.
▶ 0:53:48Ms. Fenton: Doe programs can provide technical expertise, financial assistance to help tribes design and implement solutions suited for their communities. The doe office of indian energy plays a vital role in alaska. Through technical assistance, financial planning and grants, the office supported dozens of alaskan tribes in the bing diesel hybrid systems -- developing diesel hybrid systems and geothermal.
▶ 0:54:17Ms. Fenton: They are often small in scale, but mean the difference between barely keeping the lights on and moving towards resilience. The arctic energy office provides another layer of support. These ambassadors are local practitioners that bring technical knowledge to villages and from villages, sharing lessons learned and best practices while helping residents plan and lament projects -- implement projects.
▶ 0:54:47Ms. Fenton: It ensures they are durable for existing conditions. The denali commission complements doe by braiding funding streams. We have paired epa resources and funds to complete bulk fuel storages in high need villages. Enabled more than $100 million to flow to at risk tank farms while doe ensured the projects were ready to move.
▶ 0:55:17Ms. Fenton: Alaska's partnerships look eons our borders. National and regional communication connect alaskan tribes to tribes in minnesota, montana, washington. Continuing to provide knowledge sharing on microgrids and climate technologies. Challenges of small isolated communities are not unique to alaska. Any solution developed in our villages should be replicated across indian country. Even with strong partnerships, unmet needs are growing.
▶ 0:55:49Ms. Fenton: Federal appropriations are not enough. Communities need tools for their scale and circumstances. Most rural utilities and tribes operate on razor thin margins. They cannot meet credit or requirements of existing federal loan programs and many tools remain out of reach. Without flexible accessible loan options communities aren't able to leverage grants for larger projects.
▶ 0:56:15Ms. Fenton: This is an area where congress can make a tremendous impact, expanding and simplifying mechanisms, whether through loan funds, guarantees or intermediaries with expertise could unlock projects throughout rural alaska and indian country. Technical assistance is important. Planning, engineering, financial structuring can be as difficult as construction itself.
▶ 0:56:42Ms. Fenton: Doe's office of indian energy has proven how effective technical support can be in moving projects forward, but resources are limited. Expanding funding first circuit rider programs would offer consistent and trusted assistance. I also want to emphasize this is not just an alaskan issue. Energy security and alaska's villages has implications for U.S. national security.
▶ 0:57:07Ms. Fenton: The arctic is a region of growing geopolitical importance and resilient systems support civilian communities and national defense operations. Alaska can also serve as a proving ground for advanced technologies. If hybrid microgrids, renewables, or modular reactors can work in alaska's extreme conditions they can work anywhere. Innovation supported by deal we can benefit tribal and rural communities across the country.
▶ 0:57:37Ms. Fenton: In closing I would underscore these points. Bulk fuel farms and hybrid systems determine whether communities can thrive, not just survive. Partnerships with doe through the office of indian energy, arctic energy office and other deal we with regional collaboration are critical for moving projects forward from concept to completion and building tribal capacity. To meet the scale of need we must expand beyond grants.
▶ 0:58:07Ms. Fenton: Flexible financing and sustained experience tailored to small tribal utilities are important for long-term resilience. Energy is the foundation for survival, but also for prosperity. For alaska's villages and for the nation, investing in these systems strengthens our economy, communities, and presence in the arctic. Thank you and I look forward to your questions.
▶ 0:58:31Chair Murkowski: Thank you all for your testimony. As I was listening to your remarks you're are talking about bulk fuel and it seems like yesterday's solution, storing fuel in a bulk tank, waiting for it to meet the need to power your diesel generator for your community. That is old stuff.
▶ 0:59:03Chair Murkowski: Our reality is we are still relying on old stuff in many communities. They mentioned the pioneering system and the hydropower is amazing, what they are looking to do with geothermal. A great deal goes on with innovation and pioneering buffers so many -- pioneering.
▶ 0:59:27Chair Murkowski: But for so many, the fuel you consume as your principal way to power your generator and keep warm. When I visited, many coastal communities following a typhoon, it was impactful to be with families when they were crying not over the loss of their home, but over the loss of the contents of their freezers that
▶ 0:59:58Chair Murkowski: They had spent all year fishing and harvesting, whether it was moose, caribou, berries. That was where the real tragedy was. When we think about reliability and what it means, every increment you can reduce your cost, because you can purchase in greater bulk is appreciated.
▶ 1:00:24Chair Murkowski: The value you pointed out to doe with technical and financial assistance that has allowed for these levels of security to be built are important on so many different levels. I want to ask hopefully a quick question of you Mr. conrad to start. Dr. ortiz outlined the recommendations from the report that was recently released.
▶ 1:00:54Chair Murkowski: If this hearing was greater down the line, I might say what of these recommendations have you put in place. But I recognize it is all relatively fresh. The statement was made that deal we agrees to the recommendations, and I'm assuming that is a correct statement and within the department of energy you are looking to implement those recommendations.
▶ 1:01:19Chair Murkowski: >> yes, chair murkowski, that is correct. The loan office said they agree with the recommendations are beginning it immediately.
▶ 1:01:30Chair Murkowski: I want to ask you about the indian country energy and infrastructure working group. This was previously facilitated by the national conference of state legislatures. We understand the contract was canceled in march of this year. Can you share specifically what doe is doing to keep iceiwg operating?
▶ 1:02:00Chair Murkowski: I'm told it has been a good benefit to tribal citizens, so I want to know your commitment to keeping these lines of communication open regarding iceiwg. The annual grantee convening's, which again allow for a lot of sharing that goes on.
▶ 1:02:25Mr. Conrad: Thank you for the question, senator. We do support indian country energy infrastructure working group and have taken on operations internally with federal staff for the moment.
▶ 1:02:40Chair Murkowski: You have the resources, staff and funding?
▶ 1:02:44Dr. Ortiz: -- Mr. conrad: we currently do have the staff and the funding. We would like to return to more contractor support because of the logistics of handling the meetings when they are in person. It is quite burdensome, the traveling and scheduling. It would be a request for approval.
▶ 1:03:11Chair Murkowski: Dr. ortiz, I want to talk a little bit more about this public finance pathway. You mentioned lpo's, working on it. It makes good sense. It allows tribes to utilize other revenues they may have to repay their debts.
▶ 1:03:37Chair Murkowski: It seems like a natural way to increase demand for the program without increasing risk to the federal government for default. Can you share more about what other federal loan programs may already utilize as a pathway, what benefits you see it can provide to prospective borrowers?
▶ 1:04:01Chair Murkowski: And at the same time, highlight any increased risks for the federal government you might see in utilizing this proposal.
▶ 1:04:09Dr. Ortiz: The public financing pathway that lpo has proposed has a lot of potential. It is similar to some programs run by rural development and rural service at usda. It allows bringing part of the work of due diligence or underwriting process in the house.
▶ 1:04:37Dr. Ortiz: It has the potential to reduce the review time for energy projects by scaling the level of review to the risk and size of the project. Also to reduce costs by reducing reliance on costly consultants.
▶ 1:04:55Dr. Ortiz: That said, in order to implement it, energy will have to invest in dedicated and trained staff who really know how to leverage public finance alternatives.
▶ 1:05:07Chair Murkowski: You are saying they don't exist currently?
▶ 1:05:10Dr. Ortiz: They do not currently exist. In terms of the risks of the risk to the federal government, it is not something we looked at specifically in our report, but it is worth thinking about the risk potentially to some tribal governments, in terms of the department of energy expects the public finance pathway to work by having projects being backed by tribal governments. This is essential, it recognizes tribal sovereignty, it is very important.
▶ 1:05:42Dr. Ortiz: Though at the same time, many tribal governments do not have the kinds of revenue sources that allow them a lot of discretion in where to take funds from. Because they do not have the ability to levy municipal bonds, or increased task -- tax revenue, it could pose a potential risk to some tribes and their government operating revenue.
▶ 1:06:09Chair Murkowski: Thank you for that. Senator schatz.
▶ 1:06:13Vice-Chair Schatz: Thank you, chair. Thank you to all of you for testifying. Mr. conrad, the president's budget in 2026 recommends the office of indian energy not fund wind, solar or battery projects. The first question is, are you applying some sort of prohibition retroactively to the money you still have in 2025 funds?
▶ 1:06:42Mr. Conrad: No, sir.
▶ 1:06:45Vice-Chair Schatz: Have you approved any wind, solar or battery projects?
▶ 1:06:49Mr. Conrad: With 2025 funds.
▶ 1:06:52Vice-Chair Schatz: Is your microphone on?
▶ 1:06:55Mr. Conrad: With 2025 funds.
▶ 1:06:58Vice-Chair Schatz: Appropriated funds?
▶ 1:07:00Mr. Conrad: Yes.
▶ 1:07:02Vice-Chair Schatz: Tell me what they are?
▶ 1:07:03Mr. Conrad: This calendar year?
▶ 1:07:05Vice-Chair Schatz: Sure.
▶ 1:07:07Mr. Conrad: We have not had selections and awards this year. They have been on pause. But in prior years, yes.
▶ 1:07:16Vice-Chair Schatz: I know that.
▶ 1:07:18Mr. Conrad: We have been under the continuing resolution and had our spend plan approved over the summer. We have had increments of funds unable to offer a full funding opportunity with the 2025 funds so we are looking forward to using those in the future, once we have approval to develop the notice of funding opportunity.
▶ 1:07:45Vice-Chair Schatz: Do you think the existing statute, the continuing resolution, gives you authority to have a preference for projects -- let me say it another way. Do you think the continuing resolution enables you to discriminate against wind, solar or batteries?
▶ 1:08:04Mr. Conrad: It remains as it always has. We continue to work with tribes on any project they propose or request technical assistance on.
▶ 1:08:16Vice-Chair Schatz: How many grant applications to your office have been for wind, solar and batteries in this calendar or fiscal year?
▶ 1:08:29Mr. Conrad: I would have to get back to you with the exact number. Overall, historically it is a high number.
▶ 1:08:39Vice-Chair Schatz: What I'm hearing is, and I would like to confirm this, that doe is holding up $30 million of the fiscal year 2025 funding, about half of its budget. For context, I remember one of the first interactions I had with senator mullin.
▶ 1:09:00Vice-Chair Schatz: We had an energy roundtable and he was surprised at the extent to which I was open-minded to energy sovereignty even though I clearly have a preference for wind, solar and battery but I do believe in self-determination and I don't think every fossil fuel project is an appropriate. That was the -- inappropriate. That was the beginning of a beautiful if uneven friendship.
▶ 1:09:25Vice-Chair Schatz: I would like to be assured that even though the trump administration and republicans generally have a preference for nonrenewable energy, that you are not excluding those because the truth is, coal does not pencil. Gas sometimes pencils, but sometimes you're in a line to get a combined cycle turbine. You are talking about -- geothermal is eight to 12 years and nuclear even longer.
▶ 1:09:55Vice-Chair Schatz: The cheapest and most immediate energy you can generate most of the time, not in alaska and her stand, but most of the time -- understand, but most of the time in the continental U.S. is wind and solar. If we are into energy abundance and dominance, we mean not just certain categories of energy.
▶ 1:10:22Vice-Chair Schatz: I have stretched politically to say there are instances in which, even on the island of wahoo --oahu, we are lighting things on fire for electrons. I don't love that but we don't have an alternative in the short run.
▶ 1:10:39Vice-Chair Schatz: Could you assure me you will look at this from the standpoint of what will get the maximum number of electrons on the grid, the maximum dollar amounted into tribal governments hands, as opposed to what will effectuate one political party or the other's preferences?
▶ 1:10:56Mr. Conrad: Absolutely. We are focused on using taxpayer resources to promote reliable, affordable and secure energy resources. We analyze projects based on robust analysis. We are not approving projects that raise energy costs for tribes.
▶ 1:11:14Vice-Chair Schatz: Final question with your indulgence, chair. Dr. ortiz the one big beautiful bill rescinded $75 million in credit subsidy funds. Does lpo have any remaining credits?
▶ 1:11:30Dr. Ortiz: Yes, lpo has $10.5 million in credit subsidy funds, nowhere near enough to cover the $1.19 billion in loan authority it has.
▶ 1:11:47Vice-Chair Schatz: I know it is not a lot of money but can we follow-up on the $10.5 million to make sure it gets put to good use pursuant to the statute?
▶ 1:11:56Mr. Conrad: Yes.
▶ 1:11:58Chair Murkowski: Thank you, senator schatz for the record, when we have these energy loan programs, we talk about technology neutral. That it will be whatever your source is, whether wind, solar or fossil based, coal, natural gas. That is the expectation. That it is technology neutral.
▶ 1:12:29Chair Murkowski: In my state, you are right, we have all of the above, but the projects we can get online quickest and cheapest right now are wind and solar. And we have several of these in battery storage. Even those of us coming from fossil-rich places are waiting for some of these important technologies.
▶ 1:12:57Chair Murkowski: Everything that we can do to reduce the costs that these communities are paying and to offset. Because that is what we've got right now. I don't have a list on who is next. Senator smith.
▶ 1:13:17Sen. Smith: Thank you so much for being here today. Mr. conrad, I would like to follow up on what senator murkowski and senator schatz were just talking about. This question has to do with how the trump administration is approaching its government to government relationships with tribal nations.
▶ 1:13:40Sen. Smith: A few weeks ago my staff met with your team to understand the office's work with minnesota tribes and during this meeting we were probing into how the department has conducted any tribal consultation on the administration's decision not to provide any financial or technical assistance for work on solar or wind or battery projects. What we heard then was that that tribal consultation had not occurred. Can you address this?
▶ 1:14:13Sen. Smith: Can you talk about what your plan is to hold tribal consultation on this policy to basically pause projects that are wind and solar and so forth?
▶ 1:14:27Mr. Conrad: Rightin negotiatione administration and congress right now. If that becomes law we are obligated to implement the law and follow the direction of the administration of course.
▶ 1:14:51Mr. Conrad: Looking at what our strategic plan or how we are going to implement those options would be what would be right for consultation. Rather than consult on something that we don't have an ability or we are not making the decision on as our office.
▶ 1:15:09Sen. Smith: Just to be clear, this pause is in effect, right? You are not making grants, you are not proceeding with projects based on the direction of the trump administration?
▶ 1:15:23Mr. Conrad: For the office of indian energy we have base appropriations that are not subject to the larger reviews that are going on under the iha. Our funds and our programs were paused under review.
▶ 1:15:47Mr. Conrad: As we move forward and bring things up for approval we are getting things approved and getting things back to normal as best we can.
▶ 1:15:56Sen. Smith: What my concern is, is that these projects are paused right now and that is having a big impact on indian country projects which were in progress and are now paused. What I would expect based on what the law is is that if you are going to take a policy action like that that has direct impact on tribal nations, that the legal requirement to do consultation would click into place.
▶ 1:16:24Sen. Smith: That that legal requirement is sort of underlying to the work that ie does. I mean, I think, as I understand it, the statutory authorization for ie requires that it works in accordance with federal policies promoting indian self-determination, which we all understand means specifically formal consultation.
▶ 1:16:54Sen. Smith: So I would just ask you to maybe give this additional thought and then let me know how the kind of consultation that is required would have pacific impacts on tribal nations, that that consultation is occurring.
▶ 1:17:13Mr. Conrad: Thank you for the question. We continue to engage with tribes and we held at least one of our tribe leader working group meetings and I know the other two working groups, one with fossil energy and one with nuclear energy, they continue to have meetings as well. So there is engagement that is going on. Just not that formal national consultation.
▶ 1:17:41Sen. Smith: I know that both you and I understand the difference between engagement and communication and collaboration and the formal consultation that is the understanding of what that direct government to government relationship means.
▶ 1:17:56Mr. Conrad: I hear you.
▶ 1:17:58Sen. Smith: I am sure you do. I have one more question but I am going to submit that question for the record in the interest of time. This question has to do with the excellent report that Ms. ortiz and the gao has produced at the request of senator murkowski and senator schatz, looking at the many, many barriers that are there for the tribal energy financing program.
▶ 1:18:30Sen. Smith: I specifically have some follow-up questions for you Mr. conrad around the issues of capacity building and what more needs to be done there. Thank you very much.
▶ 1:18:46Sen. Danes: To look at the purpose of today's hearing is to discuss unleashing indian energy. It is a great topic. We have been talking about this for a lot of years in montana and is very in line with president trump's goal of securing energy dominance. We may need more reliable and affordable energy.
▶ 1:19:07Sen. Danes: I remember the days before ai when you would meet with the great tech leaders in this country, the first thing they would talk about is one of their constraints was not enough skilled software developers or programmers to meet the needs of these growing businesses. Today the number one issue they bring up is energy.
▶ 1:19:32Sen. Danes: It is somewhere between 50% and 80% more power we are going to need in the next 20 years than we currently use today. Reliable affordable energy is critical not just to meet the needs of the economy going forward, but for economic development. Particularly in some rural communities in montana.
▶ 1:20:03Sen. Danes: Often times we speak with montanans, we say we have poverty with a view. We have to do better with economic development. By enhancing an economic energy portfolio based on power sources that can mean the difference between life and death in some of our bitter winter months. Montana has seen a number of success stories coming from important collaborations between tribes and the.
▶ 1:20:31Sen. Danes: The office of indian energy was helpful in providing a consultant -- with funding and technical assistance to require operator ship of the skq dam. This helped creating jobs, generating affordable hydroelectric renewable power to sell on the renewable market.
▶ 1:21:08Sen. Danes: We are famous for a lot of things. Great skiing, wonderful streams to fly fish on. A lot of folks don't realize montana has more recoverable coal than any state in the united states. There is also large tracts on the crow reservation. My good friend, chairman frank white clay of the tribe will tell you coal mining is a crucial economic driver for his tribe.
▶ 1:21:38Sen. Danes: The crow revenue act would authorize a land swap to allow the tribe to control subsurface holdings within their reservation. This would put the tribe in the driver's seat to make decisions about their own land. A very important word called sovereignty. And provide a key revenue stream to promote economic development. The crow are also eager to develop hydropower capabilities on the yellowtail dam.
▶ 1:22:08Sen. Danes: The crow tribe water settlement amendments act extends the hydropower authorization with the bureau of reclamation to ensure the tribe has enough time to complete the project. This is key because time is running out. The first question is for deputy director conrad.
▶ 1:22:30Sen. Danes: Would you agree that increasing energy revenues no matter the source is important for tribes to both bolster their economies and enhance tribal sovereignty?
▶ 1:22:43Mr. Conrad: Thank you for the question. And yes, of course. We have always talked about energy resources as solely energy generation from tribal lands. There is also revenue streams from participating in the broader energy economy as well.
▶ 1:23:10Mr. Conrad: Technologies that can be proven on a reservation with technology that they can export and work and create a revenue stream is another great viable option as well. Excited to work with them and find out more about how we can help.
▶ 1:23:27Sen. Danes: Would you agree and support our efforts that congress should pass legislation that would allow tribes to develop their own resources, whether it is coal or hydropower?
▶ 1:23:41Mr. Conrad: Absolutely. That tenent of tribal energy sovereignty, that they have the right to develop what they have for the benefit of their people, the revenue they need to provide support for those programs.
▶ 1:23:58Sen. Danes: Thank you. Chair murkowski advice chair schatz, it is time we move forward on the pro revenue act.
▶ 1:24:07Chair Murkowski: Thank you. Senator cortez masto.
▶ 1:24:17Sen. Cortez Masto: You are going to find pretty much consistent agreement here that for our tribal reservations and indian country, we need to do all we can. And the technology does need to be neutral and it is also based on geography, what is available. I will say this. This has been my frustration since I have been on this committee. I have been on this committee since I have been on the senate since 2017. Dr. ortiz, thank you for your report.
▶ 1:24:47Sen. Cortez Masto: We get these incredible facts about indian country. Indian country is always left behind, under resourced, left behind, lack of tribal consultation. Then we work together to do everything we can to change that. We introduce legislation, we appropriate, we want to make sure there is that consultation, technical assistance. Then it seems like politics always gets in the way and there is somebody in a -- somebody makes a political decision to take it away. It has frustrated all of us, no matter the administration.
▶ 1:25:19Sen. Cortez Masto: That is why you see many of us fighting to right the ship and do right by indian country. This is my frustration. The department of energy has reported that the vast majority of on electrified homes in the united states are located on tribal land. That is true in my state. I invite you Mr. conrad, come to nevada.
▶ 1:25:47Sen. Cortez Masto: I have been to indian country in my state. Some of them do not have water let alone electricity. I will say many, because of our geography and our opportunities that are provided now because of the work that we have done, have the opportunity to have electricity, a different source of electricity. Most of it will be renewable.
▶ 1:26:12Sen. Cortez Masto: We have geothermal, solar, batteries, and there has been a strong investment for so many tribal communities so that they can have that opportunity. Now here we are again with politics getting in the way and taking away those opportunities for folks to have just simple electricity in their homes that we all take for granted, quite honestly. So that is my frustration. I understand your challenges and constraints.
▶ 1:26:39Sen. Cortez Masto: But I hope you are true to your word and I look forward to working with you. That this technology should be neutral. That no matter where you live in indian country, your source of electricity should be available to you, and the federal support for it should be available to you to utilize. Based on what we received from this report. And so solar and wind, I don't like this idea of playing favorites.
▶ 1:27:10Sen. Cortez Masto: That is not what this is about. So I'm looking forward to working with you and I have listened to you and I hope we have an opportunity to work together. Dr. ortiz, I want to ask you a question. There have been a number of programs that have been zeroed out after we have appropriated some of the funds for them.
▶ 1:27:31Sen. Cortez Masto: One of them was the solar for all program which was designed to help low income and disadvantaged communities gain access to new and efficient energy technologies and lower electricity bills. The program was set to distribute $7 billion, $500 million of which had been obligated for six different tribal applicants. And just a few weeks ago the trump administration's epa announced they would be terminating that program, leaving grant recipients without the assistance they were promised.
▶ 1:28:03Sen. Cortez Masto: As you have outlined in your report, how does this leave indian country? What is the ultimate impact here for indian country when these types of programs are taken away?
▶ 1:28:16Dr. Ortiz: Thank you for the question. I think in addition to the failure to meet the nation's trust and treaty obligations and really follow through for the people of indian country, it perpetuates the myth that you can't get anything done in indian country.
▶ 1:28:36Dr. Ortiz: We have tribes and consortia who are doing so much work to come together, really leverage the kind of power sources they have on their lands, elsewhere, other resources, bring that together. They spend years planning the process. They spend years investing in finance, responding to questions from agencies, and then went something like this happens the deal falls apart and it leaves people without power and it just perpetuates this myth.
▶ 1:29:06Dr. Ortiz: That should not be the case. There is really amazing potential for energy production in indian country. One of the major benefits of this program was this technology neutral aspect of it. It really allowed tribes to be in the driver's seat to determine what was best for their situation and their resources.
▶ 1:29:27Sen. Cortez Masto: I know my time is up but I do have a question for Ms. fenton, because it is important. I appreciate the work you have done and the collaboration and thinking outside the box. I know in nevada many of our tribal communities are in really rural frontier areas and it requires them to figure out how to address some of these challenges. You talked about in alaska being a model for some of these partnerships.
▶ 1:29:57Sen. Cortez Masto: Can you talk about some of those partnerships and what I can bring back to at least indian country in nevada, where they could look to see this is a model and it is something we should be looking at that we could possibly replicate or learn from.
▶ 1:30:14Ms. Fenton: Specifically we are looking into what can be replicated. Just hearing about some of the hydropower and coal resources they have in montana, we have really found that the technical assistance getting out into communities, seeing their needs, understanding their unique circumstances for developing a project, and also taking a challenge or an issue and supporting them to get to a
▶ 1:30:45Ms. Fenton: Project. You can have an issue. It takes a lot of wor work to getk into a federal project. Loan potential, adding to that capitol stack. Having that handholding and technical assistance is crucial. It can be copy pasted to other states and tribal communities.
▶ 1:31:13Sen. Cortez Masto: Is your commission state-funded?
▶ 1:31:17Ms. Fenton: We are the regional commission for alaska. We focus on just the state of alaska. We are looking at technology transfers and seeing where we can partner with other communities and whatnot. The technical assistance aspect, the partnering aspect, and there could be some potential -- Mr. conrad and I discussed earlier today how the regionalization of this type of support can be very helpful.
▶ 1:31:49Ms. Fenton: We have seen success in alaska. Maybe we can have another coordinating body or additional communication and coordination to vocals -- focus on tribal infrastructure. We have areas in alaska that have more success because someone dedicated or a group dedicated to a particular facet of infrastructure.
▶ 1:32:16Ms. Fenton: Water and sewer for example, and we have partners that are going into the energy and power realm. And we have transportation groups. Coordinating some of the successes from that regional approach, giving that support to individual or smaller communities that need that backup. Staff turnover, they need subject matter expertise.
▶ 1:32:45Ms. Fenton: When we have it in the regions, or even in addition to having additional supplies or things located in region to take a way to add some slack in the line of the supply chain and especially in alaska whenever you are operating the short construction seasons and whatnot. I think those are some things that could be helpful in other areas.
▶ 1:33:07Sen. Cortez Masto: Thank you. Thank you for being here.
▶ 1:33:11Chair Murkowski: I think that is a good question, just in terms of what kind of sharing and partnering is going on. As different as the regions may be, there is a lot of commonality of the challenges.
▶ 1:33:33Chair Murkowski: How we can get smarter by sharing information and we have technology transfer, knowing the technical assistance you have received from doe, you not only learned a lot but they also learn from what you are able to do on the ground as well.
▶ 1:33:50Chair Murkowski: Instead of just keeping all that information, making sure that there is is a sharing of this in terms of what we can do more to help program deliverability. What you can be doing more. We all know there is limited expertise.
▶ 1:34:13Chair Murkowski: We hear that over and over again, that we don't have sophisticated grant writers, we don't have those who are really well in permit applications. And so how we can be collaborating more there I think is important. One of the questions I wanted to direct to both Mr. conrad and Ms.
▶ 1:34:34Chair Murkowski: Fenton is on the prospect for potential partnering in an area that doesn't necessarily relate to unleashing energy here. But when we are talking about housing, your house doesn't mean much other than just the roof over your head if we can't meet the energy needs providing for water and sewer hookups, providing for power there.
▶ 1:35:00Chair Murkowski: And we have seen play out in alaska a pretty great partnership between the denali commission and the alaska native tribal health consortium, working with the indian energy office and providing technical assistance has been great. We appreciate that.
▶ 1:35:27Chair Murkowski: There are a number of funding sources at the department of energy outside of the office of indian energy that aim to address home electrification, the weatherization issues, some other housing-related needs. Again, you have got technical and financial resources that we have heard great things about. The tribally designated housing authorities cannot directly access them.
▶ 1:35:59Chair Murkowski: I am hoping that we can have a follow-on conversation working with our staff senior department to talk about how we may be able to improve the efficiency of the distribution of these types of funds for housing support in places like alaska and really across indian country where we know that need is.
▶ 1:36:29Chair Murkowski: And so I am hopeful that you will have an open door on this aspect of what more can be done on the technical assistance side. And Ms. fenton, if you can address possibly the role the denali commission can play in streamlining access to the funds to access to improve, whether it is home electrification, because it is part and parcel to what we are talking about today.
▶ 1:36:59Mr. Conrad: Absolutely. That is a very exciting opportunity. And we do have the technical assistance and initial navigator service that can help guide people who are requiring technical resources and other federal resources within the scope of what they are interested in.
▶ 1:37:27Mr. Conrad: So we have dedicated staff to do that and we are looking forward to how we can be more innovative ineffective delivery.
▶ 1:37:35Chair Murkowski: Great. I like to hear that.
▶ 1:37:37Ms. Fenton: You are right to connect energy systems with housing. The denali commission as being a tool to help bridge some of the department of energy's programs with alaska's tribal housing authorities. With our broad authority that spans across siloed programs. We are not just energy, we are not just housing, we are not just water and sewer, we are not just transportation, we are all of the above.
▶ 1:38:08Ms. Fenton: Paired with our section 311 transfer authority that allows us to put together that capitol stack from both federal, state and even private organizations. We could assist coordinating across some of these fragmented funding through the various offices which we understand it makes it hard for small housing entities to access.
▶ 1:38:35Ms. Fenton: I think if we were to serve as a coordinating partner similar to housing and urban development, office of native american programs, we could potentially streamline some of that process, coordinate resources, ensure that dollars are distributed strategically and effectively. We are even in the midst of standing up a quarterly housing working group.
▶ 1:39:07Ms. Fenton: This type of coordination that we do in alaska helps see what projects are in the pipeline, what funding is available, and we try to pair it with funding opportunities to try and build that capitol stack and make projects move forward.
▶ 1:39:26Chair Murkowski: Dr. ortiz, you kind of outlined in your report some of the barriers that are out there in using the tribal energy financing program. You have got high and unpredictable costs of due diligence, you mentioned that in your testimony here today.
▶ 1:39:49Chair Murkowski: We have heard from some applicants, again, that doe hires contractors without tribal expertise. And so it just as to the time that they have to spend on the due diligence and the cost for the applicant. And this is all ahead of knowing whether or not they would be able to secure the loan or the loan guarantee.
▶ 1:40:16Chair Murkowski: So you can see a scenario where people are going to be like, no, I heard from so and so it was a bad experience, it cost them a lot of money and look where they are. Then to the point you made earlier in response to senator cortez masto here, you may be in a situation where you have done it all and now the administration has everything put on pause. All the money you spent, all the years.
▶ 1:40:47Chair Murkowski: So we are not doing a lot to sell the benefits of the program. What do we do about that? Obviously if we have these reforms that are made that our report suggests is going to be important. But there's some real deterrence that have been legitimate deterrence out there.
▶ 1:41:13Chair Murkowski: Now you have stacked on top of that just kind of the word on the street, if you will, that it is a tough process, it is expensive, and you don't get where we need to go. Do you have any good ideas on what can be done to kind of rebuild the credibility here of the program so that you are going to have additional entrants?
▶ 1:41:38Dr. Ortiz: I think there are definitely two major aspects. There is the thought of, if we are really going to revamp and rethink the existing program, doe needs to implement gao's recommendations. They need to think about due diligence costs, consider how to implement a finance pathway in a way that really doesn't place additional risk on applicants but streamlines the process.
▶ 1:42:07Dr. Ortiz: They need to rethink how they review applications to scale that review for the risk level and size of the loans. And then congress would need to appropriate enough for the credit subsidy and the costs of administering the program. That is if the program stays as it is.
▶ 1:42:28Dr. Ortiz: That would promote its major benefits of having this technology neutral, tribally driven sense where tribes are really able to leverage what they have towards economic development through saved electricity costs, revenue generation and job creation. There is another set of questions around whether or not this program needs to be in its current form.
▶ 1:42:59Dr. Ortiz: A couple of questions that came out in our report are who is administering the program. By placing the program within the loan program's office, it was put into -- it was put along with other programs that serve billions of dollars for their projects and are addressing or using cutting edge technologies.
▶ 1:43:26Dr. Ortiz: That is not what most of the tribal energy finance program applications are for. There is also the question of what kind of need the program is trying to meet. One benefit of the program is that it is remarkably flexible. The applications that have been submitted have gone from $23 million to over $8 billion. And that is wonderful.
▶ 1:43:53Dr. Ortiz: But does it make sense to have one program that is really including some of those really massive projects in with those smaller projects that might be clearly tested technology, easy to roll out, quick to implement? So those philosophical questions of like, where is it going to be? We really need tribal expertise.
▶ 1:44:17Dr. Ortiz: We really need people who understand tribal energy develop it, understand how tribal work, and really understand tribal revenue generation and how tribes whose enterprises to support their operating costs. That office needs to be competent in those skills wherever this program ways. Currently as a report pointed out, that is not a strength of the loan program's office.
▶ 1:44:48Dr. Ortiz: That is a strength of the office of indian energy. But again, thinking about the goals of the program, is it really about serving everyone or is it better to focus the program on, for example, what we heard from one expert as the missing middle of programs. The projects from around 25 million dollars to $100 million. That would meet a lot of need in indian country.
▶ 1:45:14Chair Murkowski: I really appreciate what you have shared towards the end there. Often times what happens around here, and senator, you mentioned, you have been on the committee now, your full tenure here in the senate. Often times it is like, hit replay. We have different people in front of us given the testimony that is basically the same story.
▶ 1:45:43Chair Murkowski: And it is because we try to do a tweak here to the program, or maybe we expand your authorization so instead of $20 million it is $40 million. But we really have not addressed the real operational efficiencies within the programs themselves. We don't do this level of oversight. That is what this is, an oversight hearing.
▶ 1:46:11Chair Murkowski: I appreciate you have ventured out and gone beyond just saying this is what you might want to recommend for existing programs. But maybe we need to revisit and look at this. In my head I am thinking about what the nuclear regulatory commission is dealing with on the nuclear side. And there is a big difference between permitting and siding three mile island versus what we are talking about with small modular reactors.
▶ 1:46:42Chair Murkowski: And yet it is kind of the same thing. We are going to put you in the same bucket and it will be awful. We are doing that with hydro relicensing where it doesn't make a difference if you are the hoover dam or a small dam in southeast alaska. So I think you are challenging us to look perhaps a little bit differently and how we might structure this so that we really do get that value.
▶ 1:47:10Chair Murkowski: Let me ask you, you mentioned a couple times in your testimony that the grant funding that we are providing, particularly when it comes to the fuel needs, is not enough to address the capitol needs much less the operation and the maintenance. So you have cited the need for improved public financing tools, on greater flexibility.
▶ 1:47:44Chair Murkowski: What opportunities do you see within doe's tribal energy financing program? What do you think it is going to take to make it work better in alaska, and how we can address the underutilization that we see of the tribal energy financing program?
▶ 1:48:14Ms. Fenton: To start with, we see that bundled projects and aggregating projects to get some of those efficiencies is key. So, bundling bulk fuel project for example instead of financing one $8 million take farm in a single village.
▶ 1:48:35Chair Murkowski: Remind me, how many bulk fuel projects, how many communities are being looped into this one proposal that you are working on?
▶ 1:48:49Ms. Fenton: What we call phase one, $100 million is going into 10 communities. Each community does not break down to $10 million each community. It is very site-specific and we have to get out and make sure we have our designs and whatnot. So, aggregating, having more funding at one time.
▶ 1:49:12Ms. Fenton: There are efficiencies to be gained, having projects with approximate geographic locations for field visits and logistics for the equipment and supplies to do the projects. Having mixed energy infrastructure packets together.
▶ 1:49:35Ms. Fenton: Or packaged together like tank farm, powerhouse upgrade, and renewables in a battery system package all at one time. We recognize that diesel and other bulk fuels are unavoidable in rural alaska. They serve as the backbone to the series of microgrids. While integrating renewables we need to upgrade the systems so often.
▶ 1:50:02Ms. Fenton: Having a technology neutral or energy agnostic project in a community to really push forward.
▶ 1:50:09Chair Murkowski: I am going to interrupt you there, because that is something that needs to be underscored. Sometimes the thought is, well, if we put in that wind turbine or some solar panels over here than we don't need the bulk fuel storage. We don't need that. But you've got to have the back up and you have to have intermittent sources that are not there.
▶ 1:50:41Chair Murkowski: Solar is not good 365 days a year anyway, much less in alaska. It is important that we underscore that you have coupling that goes on.
▶ 1:50:53Ms. Fenton: Absolutely. The wind doesn't always blow and the sun doesn't always shine but the diesel power is the backbone of those communities. And while integrating renewables helps with fuel shortages or price of fuel fluctuations, rural and remote communities find renewables to be a beneficial aspect of the power supply.
▶ 1:51:24Ms. Fenton: Every gallon of diesel offset is helpful at lowering long-term costs and whatnot. That is definitely a piece of the puzzle. Expanding your projects, having mixed energy infrastructure projects, and then mitigating risk by either having technical oversight for de-risking projects with grant funding,
▶ 1:51:55Ms. Fenton: Understanding the capitol stack, lowering the risk to lenders and whatnot, that can really help these projects moving forward and understanding that the furred energy and bulk fuel needs, grants are not just going to cut it moving forward. We are doing a bulk fuel aggregation study we are very excited about hearing the recommendations, but they are not ready yet for this hearing unfortunately. But stay tuned.
▶ 1:52:26Chair Murkowski: We will stay tuned.
▶ 1:52:29Dr. Ortiz: If I might jump in just on integrating different energy sources. One of the villages we visited in alaska a couple years ago for our work on microgrids that we put out last year looked at a system that had wind as well as diesel.
▶ 1:52:49Dr. Ortiz: When that village was able to add battery storage to its system, it was able to save over 60,000 gallons of diesel a year, and that is $250,000 or more to that one village. That's an amazing cost when you can really integrate recognize where tribes are and what different circumstances and different geographic factors play into their energy needs.
▶ 1:53:14Chair Murkowski: I appreciate you raising that. And I will ask you to just expand there, because you have given a specific example. But in terms of how the tefp is structured, you have suggested before that there were reforms that the report addressed with regards to the office.
▶ 1:53:46Chair Murkowski: Do you have any suggestions when it comes to the financing program specific that we might want to look to either maintain or enhance or reform, add to other programs? What do you have to offer there?
▶ 1:54:06Dr. Ortiz: I think some of the main benefits are things we have already discussed. There is the flexibility to address any kind of energy technology. This technology-neutral aspect. One other benefit is that projects for the tribal energy finance program could be done on or off of tribal lands. So when you get those partnerships working together they can really leverage different strengths from different partners.
▶ 1:54:38Dr. Ortiz: The program also allows multiple applicant types. So, a tribe could apply but a teedo could apply and also a lender on behalf of a tribe or also a tribal consortia, which really allows smaller tribes the opportunity to have ownership of these projects.
▶ 1:55:00Dr. Ortiz: A lot of tribes are used to having developers approach them and want to develop something and then maybe give the tribe some benefit but keep the bulk of the benefits for themselves. One of the great benefits of the program is that ownership aspect.
▶ 1:55:18Dr. Ortiz: That gives the prospect for the tribes of increasing the reliability of their electricity, decreasing their energy costs, and really having revenue generation and job creation along with those projects.
▶ 1:55:36Chair Murkowski: So, um, I'm, uh, I'm coming to the end of this series of questions that I wanted to raise. We have not really talked that much. It has been mentioned that staffing in the report was a concern.
▶ 1:56:07Chair Murkowski: Limited staffing to review applications. But also the expertise of this staffing. And their understanding or lack thereof of tribes and just not dealing with tribes or tribal energy development organizations.
▶ 1:56:35Chair Murkowski: It makes sense when you think it through that if you are dealing with somebody who doesn't really understand tribal application or the implications, that they are going to be learning as they go.
▶ 1:56:51Chair Murkowski: They might give you bad information, but what other complications do you see when you are dealing with those loan program offices that have unfamiliarity with tribes and the tribal energy development organizations?
▶ 1:57:18Chair Murkowski: And I don't know whether there are specific examples, where there are just ads to time and cost or if it is worse than that. Like you can get just bad information here.
▶ 1:57:29Dr. Ortiz: There are several examples of what happens when you have that turnover in staff and a lack of training. It can cause confusion, increased administrative burden for the tribes, and really lengthen that time of review and the cost. We heard from one potential applicant that it took six months to get answers to questions.
▶ 1:57:56Dr. Ortiz: We heard from one applicant that months into the process they were still getting questions about whether the project was even eligible for the program. So they were feeling really strong along. At one point lpo asked one applicant to increase the scope of its project by adding a whole different element that the tribe had not planned on encoding.
▶ 1:58:22Dr. Ortiz: And it seemed to have no appreciation for the massive burden that was, both administratively and in terms of finances and working with its development partners. And when you have no in-house expertise or not enough in-house legal expertise, we heard from one tribe about how that lack of expertise led energy to really push every question out to consultants. That that was on the tribe's dime.
▶ 1:58:54Chair Murkowski: So, in terms of processing a loan -- loan applications between -- under a tribal program versus a nontribal program. Is it about the same length of time? Have you done an analysis on that?
▶ 1:59:21Dr. Ortiz: We did not do a specific analysis for this report but gao has definitely reported on challenges with tribal energy development for many years. Including delays in terms of what it takes to go through permitting when you are dealing with trust lands and resources or complicated ownership or access issues.
▶ 1:59:51Dr. Ortiz: In terms of understanding how revenue models work for tribal governments. We know that that misunderstanding or that lack of knowledge can really extend the time. Tribes also, like other energy development, projects, face lengthy environmental reviews at times. Sometimes that is a result.
▶ 2:00:20Dr. Ortiz: Some of what might be going on in the lands in terms of cultural resources. That is not a problem necessarily. It is something that needs to be factored into the length of time it takes to review a project. Also generally most tribes don't have the kind of administrative capacity and we have reported on systematic barriers to accessing federal funds for tribes.
▶ 2:00:50Dr. Ortiz: Because of this lack of administrative capacity, a lack of an agency understanding of the tribal government structures or tribal revenue models. And all of that gets wound into this. When you place extra burdens like high equity costs, high development costs, and a really onerous due diligence process on top of all of this.
▶ 2:01:18Dr. Ortiz: Our report showed how this really just puts a damper on the whole process.
▶ 2:01:22Chair Murkowski: Mr. conrad, within the office, I am assuming that you have seen the reductions and forces that other departments, other agencies have. I don't know what your numbers are. I don't know if you can share them with me.
▶ 2:01:49Chair Murkowski: But within the loan office of the tribal energy loan program, have you lost that level of expertise? It is one thing to say I have got my numbers, I know how many people that I had in a given office. But there is a difference between the seat in the chair and a person that actually has this level of expertise that Dr. ortiz is talking about.
▶ 2:02:22Mr. Conrad: Thank you for the question. Digging into this issue and the findings of the report. Our office, while we offer technical assistance in grants, we don't do the loan program office.
▶ 2:02:52Mr. Conrad: I know people who are operating at. I have not reviewed their resumes and that sort of thing. I know our office has lost nine employees, which is a decent amount because we are a small office. Other offices have lost significantly more. But I can't address how the loan program office is able to staff the program.
▶ 2:03:23Mr. Conrad: I understand they have a few leads on the outreach team and they used portions of people's time on more of the origination of the back of the house expertise.
▶ 2:03:34Chair Murkowski: I am just thinking about the time that you conducted this report, the time you did the research for the report was while the biden administration was still in office. We have now seen a change in administration but we have also seen reductions in force across the federal workforce. So I would be curious to know where we are with those numbers.
▶ 2:04:03Chair Murkowski: But again, I recognize that numbers are not just numbers when it comes to levels of expertise.
▶ 2:04:10Dr. Ortiz: We had a recent update from the department of energy and they have about 272 fte's assigned to the loan program office. 43 of those positions were vacant and 110 of those were on administrative leave in anticipation of retirement or resignation. So we are working with fewer than half of their regular staff.
▶ 2:04:40Dr. Ortiz: On top of that during the course of our review we discussed with them dentist -- dedicated staff for the process and they had designated at least 12 individual seeds to have this expertise and really be interacting with tribes and doing -- bring their expertise into the origination process and the review process.
▶ 2:05:06Dr. Ortiz: But they told us that they really struggled to fill those seats and that they couldn't keep people. So instead they rotate folks in, and that sometimes leads to a real disconnect in terms of what tribes hear from people. So there is a very strong outreach team with a lot of experience working with tribal nations. But they don't always have the same understanding of the program that the people originating the loan due.
▶ 2:05:36Dr. Ortiz: And that creates a conflict and problems down the road as these projects move further along.
▶ 2:05:48Chair Murkowski: It just causes you to recognize even more the inequities that we see throughout indian country, what we see in places like alaska when it comes to energy. We heard today communities that don't have running water or electricity. We certainly have that in many of the villages.
▶ 2:06:15Chair Murkowski: It is always those that have the least capacity that are in the most challenging of situations. And it is just kind of this deep hole that they are in and they cannot get out. And this is where we need that level of expertise. We need the technical assistance. And we need these barriers of, ok, you are going to be able to get help with this but you have to pay these outside contractors. And basically they are getting paid by the hour.
▶ 2:06:45Chair Murkowski: And so, you look at it and you don't even know how to start. And then those who have greater capacity, greater capability, greater resources already are able to take the home that they already have that has already plumbed and wired and make it more efficient. And that is great. But we still have so many that are just working to get the basic needs met.
▶ 2:07:16Chair Murkowski: And so how we help facilitate this -- and I'm am going back to the suggestion that you raised, is that maybe we need to be separating out what is contained within this indian loan program, this tribal loan program. And have it be based on the size or the capability, I don't know.
▶ 2:07:47Chair Murkowski: But not just basically any tribal entity. Anybody is all in one bucket regardless of where you sit with regards to your capacity or your resources. So, something for us to be thinking about. I hear too many who view this as it's great that you have that back in washington, D.C. but it doesn't do me a darn bit of good.
▶ 2:08:15Chair Murkowski: And that has really bothered me because the number of people from my state who have come to me seeking out and seeking resources, and I say, don't forget we have the office of indian energy, we have these tribal loans. And they come back and say, well, out of my reach. And we have to do better by that.
▶ 2:08:44Chair Murkowski: That is why I think utilizing the resources that we have like the denali commission, where we can take these resources, do the braiding that we talk about really leveraging things within different programs so that everybody can gain access to resource.
▶ 2:09:14Chair Murkowski: Sounds like we might need some restructuring though. With that, I appreciate the testimony of all of you. This hearing record will be left open so that others may submit comments. I know members will have additional questions for the record. But I really appreciate what you have done and the opportunity for a good discussion about an important project.
▶ 2:09:43Chair Murkowski: With that, committee stands adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]