DOE Loan Programs Office announces $72.8 million for microgrid on Tribal lands

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The Viejas Microgrid Project, which is already under construction, will provide the Viejas Band of the Kumeyaay Indians a 15 MW solar plant along with a 38 MWh long-duration battery energy storage system (BESS). The solar-plus-storage microgrid will be located near San Diego, California.

The 15 MW of solar modules from JA Solar are being installed by Indian Energy LLC on parking structures on the Tribal land and will supply electricity to the non-lithium, vanadium-flow BESS as well as to the local grid. Invinity Energy and Eos provided the BESS.

The Viejas Band will purchase electricity through a subsidiary in a long-term power purchase agreement (PPA) to help operate gaming, hospitality and retail businesses. When complete, the project will allow the Tribe to benefit from a lower levelized cost of energy, allowing additional resources to be redirected toward investments by the Tribe in infrastructure maintenance, operation of the fire department, Tribal culture and educational programs, and other Tribal member services.

“This solar microgrid project will enable us to create a reliable and sustainable source of clean energy for our gaming, hospitality, and retail operations going forward. In turn, the associated non-lithium battery system supports the environmental protection and cultural stewardship of our ancestral land, thereby ensuring the vibrant future of our children,” said John Christman, chairman, Viejas Band of Kumeyaay Indians.

This is the first project to be offered a conditional commitment of $72.8 million through the Tribal Energy Financing Program, which was provided new and expanded loan authority the Inflation Reduction Act (IRA). The partial loan guarantee will help build the microgrid, which will help the Band’s economy by lowering the cost of energy as well as bringing job opportunities. While the LPO demonstrates its commitment to financing the project, the project must reach critical milestones, and certain technical, legal, and financial conditions must be met before the LPO enters into definitive financing documents and guarantees the loan.

The project is expected to create 250 construction jobs and eight permanent operations jobs, including prioritizing Tribal-, minority-, and veteran-owned contractors. In addition, LPO works with all borrowers to create good-paying jobs with strong labor standards during construction, operations, and throughout the life of the loan and to adhere to a strong Community Benefits Plan.

The project also supports the Justice40 Initiative, which has a goal that 40% of overall benefits of certain federal investments, including LPO financing, go to DOE-identified disadvantaged communities (DACs), which includes the Viejas Tribal Lands.

The borrower, IE VEM Managing Member LLC, is a Tribal energy development organization (TEDO) ultimately owned by the project developer Indian Energy LLC, and two federally recognized Tribal Nations. The two Tribal Nations will receive revenue streams from the project through their ownership stakes in the project.

The Tribal Energy Financing Program supports Tribal investment in energy-related projects by providing loan guarantees to federally recognized Tribes, including Alaska Native villages or regional or village corporations, or a TEDO that is wholly or substantially owned by a federally recognized Indian Tribe or Alaska Native Corporation. The program was authorized in the Energy Policy Act of 1992 and first funded by Congress in 2017. The IRA, which was passed in 2022, increased the program’s available loan authority from $2 billion to $20 billion, and changes from both IRA and the Consolidated Appropriations Act, 2022 made permanent the ability for applicants to apply for direct loans from U.S. Treasury’s Federal Financing Bank through the program.

In addition to the commitment from the LPO, the project received a $31 million grant from the California Energy Commission (CEC) to deploy the BESS.

The Viejas Band is one of 12 bands of the Kumeyaay Indian Nation which resides on a 1,600-acre reservation in the Viejas Valley, near the town of Alpine in San Diego County. The Band is recognized as a sovereign government by the United States.

Indian Energy operates a multi-year development pipeline that consists of 4 GW of solar and wind projects, and 6 GWh of energy storage projects.

This article was amended to revise the amount of the loan commitment, per LPO.

 

 

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