By Kennedy Maize
In a little-noticed proceeding, the Department of Energy in October again moved to centralize and federalize electricity generation. In a letter to the Federal Energy Regulatory Commission, DOE attacked FERC’s policy of recognizing the right of Indian tribes to veto hydropower projects on tribal land.
The DOE letter on tribal authorities, including a draft Notice of Proposed Rulemaking, came the same day, October 23, that Energy Secretary Chris Wright controversially told FERC he wants the commission to prioritize large load data center requests to connect to the transmission grid, bypassing state and regional grid authorities.
FERC issued a DOE-written Notice of Proposed Rulemaking (NOPR) on the data center fast track. That proceeding has gotten a lot of attention and is under review. The data center line-jumping order overshadowed DOE’s contemporaneous tribal sovereignty proposal.
In February 2024, FERC adopted a policy that energy projects under the commission’s jurisdiction on sovereign tribal lands must have tribal support. The commission noted that the policy is already in place in the U.S. Interior Department and other federal land management agencies.
In the pumped hydro order, FERC rejected preliminary permits for three proposed projects on Indian land, including Black Mesa on Navajo territory, the most significant. In a recent article, Grist noted that the mesa’s steep drop was ideal for gravity-based pumped storage.
The proposed Black Mesa project consisted of a 1,500-MW closed-loop hydro generating system, using water from the San Juan and Colorado rivers and groundwater. Environmental and tribal groups objected to the plan by developer Nature and People First, a Massachusetts limited liability corporation founded by French energy entrepreneur Denis Payre.
In comments,17 Navajo tribal chapters and grazing committees objecting to the plan, charging that it would require nine reservoirs and 450,000 acre-feet of water, diverting water the communities need for domestic purposes. The region is in a long-term drought.
When FERC rejected the projects, then Chairman Willie Phillips said that the commission will be “committed” that “tribal interests are carefully considered.”
Also on Oct. 23 of this year, Energy Secretary Chris Wright called on FERC to back down on the tribal sovereignty issue and reverse its 2024 policy. As with the data center proposal, DOE attached a draft NOPR, which FERC issued on Oct. 27. The DOE letter calls on FERC to take “immediate and final action (and no later than December 18, 2025) to provide assurance to the hydroelectric industry. That’s the date for FERC’s upcoming December meeting this Thursday.
In the letter, Wright asserted that “the Commission has created an untenable regime whereby it has effectively delegated its exclusive statutory authority to issue preliminary permits to third parties.” This practice, said DOE, is “ultimately to the detriment of hydroelectric development.” The draft order states, “Congress authorized and empowered the Commission to issue preliminary permits; it did not authorize and empower third parties to deny preliminary permits.”
Both Wright letters to DOE appear to be the work of James Danly, deputy energy secretary and a FERC veteran. He served as FERC general counsel in the first Trump administration, appointed in 2017. He was promoted to a seat on the commission in March 2020 following the untimely death of FERC Chairman Kevin McCarthy of brain cancer in 2019.
Trump named Danly FERC chairman two days after the November 2020 elections. He served for only 77 days, when new President Biden named Rich Glick chairman. Danly stayed on the commission until his term expired in January of 2024. He rejoined the New York law firm of Skadden, Arps, Slate, Meagher & Flom, where he worked before his FERC appointment. When Trump was reelected in 2024, he transitioned to DOE. He was sworn in as Wright’s deputy in June, 2025.
At FERC, Danly earned a reputation for having sharp elbows and a temper. Bloomberg commented on him at the end of his FERC term: “Danly was a sharp-tongued dissenter” at FERC, and “has been one of the loudest voices expressing concern about the pace of coal-fired power plant shutdowns in many states….”
FERC’s hydro NOPR has received a host of comments, heavily opposed to reversing the original policy on tribal rights. Of 52 comments filed at FERC by the end of last week, 50 opposed the DOE proposal. Only the National Hydropower Association, the Washington-based hydropower industry lobbying group, favored the regulatory rollback. One comment, from New York-based Brookfield Renewable Trading and Marketing LP, asked to intervene in the rulemaking.
In its comments, the Navajo Nation said, “The denial of preliminary permit applications pursuant to the 2024 Policy was not to the detriment of hydroelectric development on Navajo Nation lands. The 2024 Policy facilitated engagement between developers and the Navajo Nation and early project coordination – important components of project success when considering the multi-decade permitting, construction, and operation timelines for large-scale hydroelectric power projects.”
The Navajo comment noted, “The 2024 Policy resulted in developers engaging with the Navajo Nation, its political subdivisions, and the local communities where the project would be located; obtaining non-invasive access authorization and permission to survey from the Nation under Navajo law; and reapplying for preliminary permits without opposition. At least two (2) proposed projects are in the feasibility stages of project development.”