Indian Energy Purchase Preference—Background and Resources

Background

In the Energy Policy Act of 2005, Congress authorized federal agencies and departments to give preference to Tribal majority-owned businesses when purchasing electricity, or any energy products or byproducts (codified at 25 U.S.C. § 3502(d)). Specifically, the law provides:

(d) Preference

(1) In purchasing electricity, or any other energy product or byproduct, a Federal agency or department may give preference to an energy and resource production enterprise, partnership, consortium, corporation, or other type of business organization in which the majority of interest is owned and controlled by one or more Indian Tribes.

(2) In carrying out this subsection, a Federal agency or department shall not:

    (A) pay more than the prevailing market price for an energy product or byproduct; or

    (B) obtain less than prevailing market terms and conditions.

This preference is known as the “Indian Energy Purchase Preference (IEPP)” or “Tribal Power Preference.” The IEPP is available to “Tribal majority-owned businesses,” which refers to business organizations in which the majority of interest is owned and controlled by one or more Indian Tribes.

In November of 2022, the Biden-Harris Administration announced a renewed commitment to the IEPP. Since then, the White House Council on Native American Affairs, Department of Energy (DOE), Department of Defense (DOD), and the General Services Administration (GSA) have worked collaboratively to encourage and expand implementation of the IEPP. In 2023, DOE Secretary Granholm signed a memorandum confirming DOE’s commitment to implementation of the IEPP, emphasizing full use of the IEPP beyond the acquisition of electricity to buying energy products and byproducts. Energy attribute certificates (EACs) and renewable energy certificates (RECs) are just a couple examples of energy products which the preference could be applied to.

Prior to Secretary Granholm’s memorandum, President Biden had signed Executive Order 14057, calling on the federal government to achieve 100% carbon pollution-free (CFE) electricity on a net annual basis by 2030. This Executive Order is driving new procurement opportunities in the federal government, and thereby increasing opportunities to potentially apply the IEPP, including through federal government procurements of EACs and RECs. As of May 2024, DOE estimates that Indian Tribes are producing 28 GWh per year of CFE, which could produce EACs and RECs compliant with E.O. 14057.[1]

[1] E.O. 14057 Implementing Instructions (sustainability.gov) promotes the purchase of EACs provided they are generated from carbon pollution-free sources that were placed in service after October 1, 2021.   

Past Federal Acquisition Solicitations That Have Incorporated the Preference

In 2024, federal agencies issued acquisition solicitations that included the IEPP. Examples of use of the preference include solicitations by GSA and DOE’s Western Area Power Authority (WAPA) to buy EACs and RECs from Tribal majority-owned businesses.

These IEPP solicitations strengthen Tribal energy collaborations that are central to U.S. government sustainability objectives while honoring Tribal sovereignty and fostering prosperity in Indian Country.

Resources and Contacts

For Indian Tribes and Tribal Majority-Owned Businesses

All inquiries on an active solicitation should be directed to the agency contacts listed on the solicitation. 

IEPP Contact for Tribes

Email the Office of Indian Energy to learn more about the IEPP or potentially working with federal agencies.

The Office of Indian Energy is a resource for Indian Tribes and Tribal majority-owned businesses wishing to learn more about the IEPP or potentially working with federal agencies. To contact the Office of Indian Energy, please submit inquiries to [email protected] and add “Indian Energy Purchase Preference” in the subject line. Please be as specific as possible in your email to aid in responses.

The FEMP Energy Savings Performance Contract ENABLE Program offers resources for small federal projects to install energy conservation measures. This can help sites make progress toward energy efficiency goals, including a streamlined process to install targeted energy conservation measures such as lighting, water fixtures, simple HVAC system replacement, and solar photovoltaics. Tribal majority-owned businesses that provide these services as energy service companies (ESCOs) may be eligible to potentially work with smaller, individual federal sites through ENABLE if the Tribal business organization is registered as an Energy Savings Performance Contract (ESPC) ENABLE ESCO and all eligibility requirements are met. More information is available at this DOE webpage.

For Federal Entities

The Federal Energy Management Program (FEMP) offers technical assistance to federal facilities in the development of solicitations and contracts using the IEPP. Please contact the FEMP Technical Assistance portal and include “Indian Energy Purchase Preference” in the message. The federal government is required to follow state law, where applicable, in the procurement of electric service (40 U.S.C. § 591).

FEMP supports federal projects through multiple programs, including the Assisting Federal Facilities with Energy Conservation Technologies (AFFECT) Program. The AFFECT program has included the IEPP as a selection factor (as of April 2024). AFFECT provides grants to federal agencies for leveraging federal and private capital to make energy efficiency upgrades and to provide on-site clean energy generation for federal buildings as part of an all-government approach to addressing the climate crisis and boosting economic competitiveness.

As provided above, the FEMP Energy Savings Performance Contract ENABLE Program offers resources for small federal projects to install energy conservation measures. This can help sites make progress toward energy efficiency goals, including a streamlined process to install targeted energy conservation measures such as lighting, water fixtures, simple HVAC system replacement, and solar photovoltaics. Advantages to obtaining services through the ENABLE Program include: zero upfront capital costs to the agency; guaranteed energy cost savings sufficient to pay for the project; a measurement and verification (M&V) component to ensure energy savings are achieved; standardized contract tools to speed the award process; and qualified vendors, including small business firms, that can provide project financing opportunities. Federal agencies may determine whether to apply the IEPP in ENABLE performance contracting and give preference to an eligible ESPC ENABLE ESCO, provided all other IEPP requirements are met.

For Utilities

Utilities can be an important bridge for transmitting power generated from Tribal majority-owned businesses to federal facilities looking to buy power. Holding listening sessions, engaging with Tribal communities, and seeking Tribal representation on utility decision-making boards are critical steps toward successfully implementing the IEPP. Utilities are encouraged to first reach out directly to Indian Tribes and federal facilities if they would like to get involved in IEPP projects. Tribal utilities may be eligible for assistance through the Office of Indian Energy and all utilities can find additional support through the Grid Deployment Office’s: State and Tribal Grid Resilience and Transmission Planning Resource Hub (this hub includes information on Grid Resilience Formula grants for States and Indian Tribes).

FAQs

The following is provided for international purposes only, and is not intended to, and should not be construed as, legally binding on DOE or other federal agencies and departments.

  • The IEPP was passed as part of the Energy Policy Act of 2005, specifically Section 503(d), (now codified at 25 U.S.C. § 3502(d)).

  • 25 U.S.C § 3502(d) does not restrict where electricity, or energy products or byproducts, are produced to qualify for the IEPP.  Additional restrictions or limitations may apply for individual solicitations.

  • Yes, businesses that are majority owned by one or more Indian Tribes, including ANCs, qualify under the IEPP definition of Indian Tribe. For purposes of the IEPP, an Indian Tribe is defined in 25 U.S.C § 5304 (referenced in 25 U.S.C § 3501(4)(A)) as any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act [43 U.S.C. § 1601 et seq.] which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.

  • No. The statutory authority for the IEPP provides that a federal agency or department may give preference to Tribal majority-owned businesses in accordance with 25 U.S.C. § 3502(d) but is not required to do so. Each agency or department has the discretion to determine the circumstances and methods to implement the IEPP and may develop its own regulations or guidance to implement the IEPP in its procurement activities. The IEPP may only be applied, however, in the circumstance where the agency or department is engaged in the procurement of “electricity, or any other energy products or byproducts”.

  • The preference applies to the Federal Government’s purchase of electricity, energy products, or energy byproducts from Tribal majority-owned businesses; therefore, an indirect sale to the Federal Government would not qualify for the preference. 

  • ... or energy products or byproducts, to the federal Government under the IEPP?

    The statutory authority for the preference does not address whether the Tribal majority-owned business may contract with a third-party to assist in the sale of electricity, or energy products or byproducts, to the federal agency. Each federal agency has the discretion to determine the circumstances and methods to implement the IEPP.

  • Beyond electricity, the Energy Policy Act does not specify, describe, or restrict the types of energy products and byproducts covered by the IEPP. The following are some examples (non-exhaustive) of energy products and byproducts potentially covered by the IEPP:

    • Energy Attribute Certificates (EACs) and Renewable Energy Certificates (RECs).
    • Renewable Resources: wind, solar, geothermal, bioenergy, and incremental hydropower.
    • Renewable Products: renewable fuel or feed sources, such as woody biomass and biofuels.
    • Demand response to manage energy consumption.

    Each agency has discretion to determine what types of energy products or byproducts they are seeking in a procurement. For example, some procurements may specify renewable energy or carbon pollution-free electricity and define those terms as appropriate (for example, see the E.O. 14057 Implementing Instructions).

  • No. A federal agency or department may not pay more than the prevailing market price for an energy product (including electricity), or byproduct, or obtain less than prevailing market terms and conditions (25 U.S.C. § 3502(d)(2)). Prevailing market terms and conditions may depend on local factors associated with the purchase price of particular commodities or services that are common or widespread in the marketplace in which the commodities or services are sold. 

  • Tribal majority-owned businesses wishing to compete to sell electricity, or any energy product or byproduct, to a federal agency or department under the IEPP will need to apply in response to specific procurement opportunities (often announced and available through SAM.gov or the soliciting agency’s own website). Federal agencies or departments should state in the procurement opportunity announcement whether the procurement is limited to Tribal majority-owned businesses, or it is open to broader competition, but preference will be given to Tribal majority-owned businesses. Examples of current procurement opportunities are shown above.

  • ...businesses?

    The following non-exhaustive list of statutes and regulations may apply to a federal agency or department when purchasing electricity from any entity, including a Tribal majority-owned business:

    • 40 U.S.C. § 591 (statutory requirements for the purchase of electricity)
    • 40 U.S.C. § 501 (statutory maximum 10-year contract length for the GSA)
    • 10 U.S.C. § 2922a (statutory maximum 30-year contract length for the DOD)
    • 48 C.F.R. Part 41 (GSA regulations for the Acquisition of Utility Services)
    • 41 U.S.C. § 3101 (The Competition in Contracting Act).

  • The Buy Indian Act (25 U.S.C. § 47) applies only to specified federal agencies: The Department of Interiors Bureau of Indian Affairs and the Department of Health and Human Service’s Indian Health Service. In addition, the Buy Indian Act allows for the purchase of products from Indian-owned and controlled businesses, which includes companies owned by Tribal citizens as well as Tribal majority-owned businesses.

    The IEPP applies to all federal agencies and departments. However, this authority only allows for the purchase of electricity or other energy products or byproducts from Tribal majority-owned businesses (that is, an organization in which the majority of the interest is owned by one or more Indian Tribes) and does not apply to Indian Tribes themselves or companies that are owned by Tribal citizens.

  • Federal energy goals articulated in E.O. 14057 and the Energy Policy Act of 2005 are driving certain procurement opportunities under which the IEPP can be applied. E.O. 14057 requires the federal Government to meet the goal of being powered by 100% carbon pollution-free electricity by 2030. It also directs the federal Government to achieve net-zero building emissions and 100% zero-emission vehicle acquisitions by 2045 and 2035, respectively. The Energy Policy Act of 2005 sets a goal that each fiscal year at least 7.5% of federal electricity consumption is fulfilled by renewable energy.

Additional Resources and Past Presentations