Source:  USDA, 11/23/10

Agriculture Secretary Tom Vilsack today announced funding to stabilize and reduce energy costs for residents of remote rural areas where the current cost of producing electricity is extremely high. The funds are being provided through the USDA High Energy Cost Grant program.  Much of the funding will be used to construct renewable energy projects.

   “These grants will help home and business owners offset rising energy costs by financing energy efficiency and power generation improvements to deliver energy in a more cost-effective and environmentally appropriate way,” Vilsack said.

  The program is administered by USDA Rural Development’s Rural Utilities Service. Recipients use funds to improve energy generation, transmission or distribution facilities that serve communities where the average residential cost for home energy exceeds 275 percent of the national average. Grants are available to individuals, businesses, non-profit entities, states, local governments and federally recognized Indian tribes.

  For example, the Denali Commission in Alaska was awarded $8 million for energy generation and distribution projects, including $4 million to support construction of renewable energy and efficiency projects in extremely high-cost remote villages in Alaska. The villages to be served are predominantly Alaska Native and many of the communities use fuel oil to run small power plants.  In January of 2010, the height of the last Alaskan heating season, retail fuel oil prices statewide averaged $5.36 per gallon, according to figures from the Alaska Division of Community and Regional Affairs. In prior years, funding provided through the High Energy Cost grant program has been used to in Alaska construct wind generators in villages, significantly reducing the amount of fuel oil burned, resulting in a reduction in fuel charges per KWH.

  The American Samoa Power Authority will receive over $3 million in two separate grants. A grant of $1.14 million will fund an engineering and environmental feasibility study for a renewable energy project to replace generation facilities destroyed by the 2009 tsunami. The Power Authority also received a $2 million grant to establish a bulk fuel revolving fund to reduce credit costs for the Island’s bulk fuel purchases. The fund is replenished as the purchased fuel is sold.

  The Aquinnah Wampanoag Tribal Housing Authority in Massachusetts will receive $750,000 for an energy efficiency and solar photovoltaic project to provide electricity for the tribal homes and offices.
  The Yurok Tribe of Klamath, California was awarded $750,000 for completion of an additional two-mile segment of the Tribe’s rural electrification project to connect additional homes, a day care, school and the community water treatment plant.  Over the past six years, the Tribe has completed 14 miles of line through rugged terrain of the reservation that will bring electricity service to homes, schools, and community facilities on the remote reservation for the first time.  

  Maine School Administration District No. 58 was awarded $98,810 for a biomass heating facility that will support testing and monitoring of the two boilers installed under a previous grant. These funds will help the community replace imported fuel oil with locally produced wood fuel.

  The funding announced today totals more than $12 million. Funding for individual recipients is contingent upon their meeting the conditions of the grant agreement. These funds may not be used to pay utility bills, purchase fuel, or be used for the sole benefit of the applicant.

  USDA, through its Rural Development mission area, administers and manages more than 40 housing, business and community infrastructure and facility programs through a national network of 6,100 employees located in the nation's capital and nearly 500 state and local offices. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America. Rural Development has an existing portfolio of nearly $142 billion in loans and loan guarantees.