Over $130 million in grants allocated to clean energy projects in rural Alaska are now frozen, following one of President Donald Trump’s executive orders. The projects – which include hydroelectric dams, wind turbines and solar energy systems – aim to lower energy costs in rural communities and bring them additional revenue to support crucial infrastructure.
Trump signed dozens of executive orders during his first day in office, including one that freezes funding from the federal Inflation Reduction Act and Bipartisan Infrastructure Law. A section of that order mandated that federal agencies pause the disbursement of funds appropriated through those acts.
That’s created uncertainty for many Alaska projects — including two large wind turbines slated to be built in Kotzebue. Those turbines, along with the community’s existing renewable energy assets, would allow the community to produce more than half of their energy from solar and wind, said Chad Nordlum, the energy project manager for the Native Village of Kotzebue. He said it’s unclear now if the funding freeze will affect the project’s timeline.
“The freeze that Trump has put on the Inflation Reduction Act has definitely caused a lot of concern for Kotzebue for the wind project,” Nordlum said. “It puts a lot of questions out there. Right now, there doesn't seem to be much we can do on our end. We're just waiting for clarity.”
How freeze affects projects in progress
The Alaska Native Tribal Health Consortium has partnered with tribes across the state, including in Kotzebue, to receive the federal grants. In total, they’ve been awarded contracts for about $132 million, said Katya Karankevich, a project manager at ANTHC’s Department of Environmental Health and Engineering.
The contracts covered hydroelectric dams in Old Harbor and Chignik Bay; wind turbines in Kotzebue, Toksook Bay and Chevak; and solar energy systems in Ouzinkie, Brevig Mission, Elim, Koyuk, Savoonga and Teller. ANTHC also received about $32 million for their own grant program for solar, which would cover between nine and 12 additional communities.
And ANTHC has already started spending or obligating funds with contractors on 30% of the projects, Karankevich said. With the federal funding freeze, the consortium now cannot request reimbursement for the work already started, she said.
“We will have another $19 million obligated for local contractors to perform work in the next 90 days on these projects,” she said. “While this hold is an inconvenience to us, it’s a bigger burden for local businesses who want to get paid for work already completed under these contracts.”
Energy projects benefiting local economy
In addition to decreasing communities’ carbon footprints, the projects aim to support local economies.
Because energy from renewables is cheaper than transported diesel, the projects would help residents lower their bills – a welcome factor in places where fuel can cost up to $22 a gallon.
“Not being so dependent on the outside oil markets, producing our own electricity here in Kotzebue is a big benefit,” said Nordlum with the Kotzebue village. “I think it’s a big deal.”
Because the tribes would own the energy assets, they would also be able to sell power to local utilities and invest that revenue in local infrastructure.
“We're trying to get all off-the-road-system communities on board with the idea to do renewable energy in a completely different way,” Karankevich said. “And that is to set up the communities themselves to sell power to themselves and to use the earnings for public benefit.”
Supporting clean water access
In Old Harbor on Kodiak Island, recent funds advanced a project that residents have been working on for decades: a hydroelectric dam that would power the whole community.
Cynthia Berns, a project manager for the Alutiiq Tribe of Old Harbor, said that the tribe and ANTHC restructured the project so that, after covering maintenance costs for the dam, profits from hydro energy would pay for residents’ utilities bills.
“It'll pay for the annual water bill and half of an average residential electric bill, which will give continued access to clean water and electricity regardless of their ability to pay,” Berns said. “We're really excited about this.”
Many rural Alaska villages lack reliable access to clean drinking water and sewer infrastructure — some still rely on honey buckets and bottled water. And when water and sewer systems are installed, maintaining them in Arctic and sub-Arctic climates is extremely costly for small communities. Karankevich said that’s why ANTHC wanted to find ways to use revenue from renewables to keep local infrastructure running.
“Now that tribe or city owns that renewable asset, and they're selling power to their local utility,” she said. “Then that money, that kitty, now can be used for water and sewer costs to make sure that the water keeps flowing, the sewer keeps going exactly where it's supposed to go and that any unforeseen expenses – or regular operation and management expenses – can be taken care of.”
Karankevich said all of the projects affected by the order have feasibility studies that showed them to be cost-effective options She said that despite the funding freeze, the agency plans to keep those projects moving forward
“We have deliverables to the federal government to build them for the benefit of rural Alaskans,” she said. “This federal freeze is a hindrance, but we owe it to Alaska Native people to continue our projects in all phases of design, permitting and construction.”
Correction: An earlier version of this story mistakenly said that some rural communities without water systems rely on bottled water for drinking water.
