Dive Brief:

• The Viejas Band of Kumeyaay Indians has closed on a $72.8 million loan guarantee to finance the deployment of a microgrid with 15 MW of solar paired with 70 MWh of long-duration energy storage east of San Diego, the U.S. Department of Energy Loan Programs Office, or LPO, said Friday.
• The Viejas microgrid is the first microgrid project supported by LPO to incorporate long-duration energy storage, a DOE spokesperson said. It will support “the largest single electric vehicle charging hub in North America,” said Craig Reiter, chief sustainability officer for Indian Energy, the project developer. 
• The microgrid project aligns with tribal “energy sovereignty” goals and allows the Viejas Band to more rapidly increase its electric load without waiting in the queue with other customers for expanded utility service, LPO Director Jigar Shah told Utility Dive.

Dive Insight:

The Viejas project is the first loan closing announced through LPO’s Tribal Energy Financing Program, or TEFP, Secretary of Energy Jennifer Granholm said in a statement.

Authorized by the Energy Policy Act of 2005, TEFP remained unfunded until 2017. The Inflation Reduction Act increased the program’s loan guarantee capacity from $2 billion to $20 billion.

According to Shah, the announcement was an important milestone for TEFP that boosted other tribes’ trust in the initiative.

“You can imagine a lot of other tribes were waiting for someone else to go first before they enthusiastically used the program,” Shah said.

LPO is evaluating approximately $5 billion in TEFP applications, he said.

The Viejas microgrid project sits just off the main freeway between Phoenix and San Diego, Reiter said. The charging hub, which came online last month, has 410 Level 2 chargers and eight dual-port DC fast chargers, he said.

Indian Energy is aiming for the microgrid itself to be operational in September 2025, Vice President of Engineering Allen Cadreau said.

The microgrid’s storage component — the largest non-lithium behind-the-meter storage installation in California, according to Indian Energy — will combine 10 MWh of Invinity vanadium flow batteries and 60 MWh of Eos aqueous zinc batteries. The project’s planned storage capacity has grown since the initial announcement thanks in part to a new product offering from Eos and $12 million in additional grant funding for the microgrid project from the California Energy Commission, Cadreau said.

“[California] has lofty goals to get as much long-duration storage as possible out of the gate, and this project is in alignment,” he said.

The CEC’s grant totaled $43.3 million, complementing LPO’s $72.8 million loan guarantee, Indian Energy said Friday. The loan guarantee covers up to $100 million in loan proceeds from U.S. Bancorp Impact Finance, LPO said.

The Viejas Band will enter into a long-term power purchase agreement with an entity co-owned by Indian Energy, the Sault Ste. Marie Tribe of Chippewa Indians and the Turtle Mountain Band of Chippewa Indians, LPO said. The arrangement will lower the tribe’s levelized energy costs from year one and for “a minimum of 30 years thereafter,” Indian Energy CEO Allen G. Cadreau said.

With costs lower than power supplied only by the local electric grid, the microgrid project will free up funds to support tribal cultural and educational programming, infrastructure management and basic services, Cadreau said.

The microgrid will have other benefits for the tribe, including 100% renewable energy for its commercial and hospitality loads, “energy surety” for emergency services and support facilities, reduced impacts from safety-related utility shutoffs and the creation of a local grid asset to support CAISO’s Emergency Load Reduction Program, he added.

“[This project] puts the Viejas Band of Kumeyaay Indians on the national energy map as the tribal leader in energy sovereignty,” Cadreau said.