The Navajo Nation and Sandia have cooperated since the 1980s. The memorandum of understanding announced Friday extends their agreement for another five years, with an additional automatic five-year extension unless one of the parties opts out.
The agreement comes as the tribe is forging an energy policy to take advantage of the coal, natural gas, wind and solar resources on Navajo land.
"They're taking energy policy on for the first time in a strategic way," said Rick Stulen, vice president for energy programs at Sandia National Laboratories. "What they're doing right now is really important."
The tribe has rich energy resources on the reservation.
Navajo Mine, operated by BHP Billiton through a lease with the Navajo Nation, provides coal to the adjacent Four Corners Power Plant west of Farmington. The Navajo Nation also boasts some natural gas reserves, and has strong potential for solar and wind development.
President Ben Shelly and his staff have been working on the energy policy for about a year and a half, said spokesman Erny Zah.
"We're now in a position to find ways and solutions for our energy that coincide with a more progressive approach that is long-term versus the get-rich-quick kind of scheme," Zah said.
"We're going to make that available to the Navajo Nation to help them make the decision on whether they want to be involved in large wind farms," Stulen said.
The tribe wants to approach energy with careful planning. In the past, the Navajo Nation has been vulnerable to "snake-oil salesmen" who left the tribe holding the short end of the stick, said Zah.
"This is the foundation for the Navajo Nation to begin to manage and protect all our resources in a way that is good for every one," he said.