USDA Announces Funding to Help Reduce Energy Costs in Rural Areas

USDA Deputy Under Secretary Doug O’Brien today awarded grants to help reduce energy costs for residents in remote rural areas where the expense of producing electricity is extremely high. The funds are being provided through USDA’s High Energy Cost Grant program.

“These grants will help residents and business owners finance energy efficiency and power generation improvements that will deliver energy more cost-effectively and help the environment,” O’Brien said.

The High Energy Cost Grant 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 businesses, non-profit entities, states, local governments and federally recognized Indian tribes.

USDA is providing nearly $11 million in grants in today’s announcement. Funding for each grant is contingent upon the recipient meeting the conditions of the grant agreement. The grantees are:


• Kipnuk Light Plant: $2,974,816 – To produce energy from wind, heat and diesel power. This is expected to lower home heating fuel use by 8,800 gallons and reduce the amount of fuel required for power generation by 35-40 percent. The community of Kipnuk generates its own power and is not tied into grids of neighboring communities or into power providers.

• Alaska Village Electric Cooperative, Inc.: $358,800 – To replace a 23-year-old, inefficient generator serving the citizens of Noatak, which has very high energy costs due to the lack of roads or barge systems. All fuel and other supplies must be flown in. The funding will also help reduce heating costs for community facilities by adding a heat recovery system.

• The Denali Commission: $2,310,686 – To build or improve energy facilities in rural Alaskan communities. Most rural areas in Alaska qualify for High Energy Cost Grant assistance.


• Kauai Habitat for Humanity, Inc.: $298,029 – To purchase and install 43 roof-mounted photovoltaic systems: 27 on new homes and 16 as retrofits on recently completed homes in the ′Ele’ele subdivision. The recently completed homes have solar hot water systems and insulation funded by a previous High Energy Cost Grant. Solar water heating has proved so cost effective that Kauai Habitat for Humanity has included it as a standard feature in all of its home construction budgets.

Republic of the Marshall Islands

• Marshalls Energy Company, Inc.: $1,000,000 – To help the company improve cash flow to make timely payments to its automotive diesel oil supplier. This will ensure that MEC has sufficient fuel on hand at all times for power generation and sales to customers.


• Sacred Power Corporation, Inc.: $1,019,611 – To install solar photovoltaic units to bring electricity to 65 off-grid homes in communities of the Aneth chapter of the Navajo Nation. Residents have among the lowest income in the nation. More than half live below the poverty level.

Virgin Islands

• Veriown Energy, Inc.: $3,000,000 – To deploy 2.16 megawatts of solar power at the University of Virgin Islands campuses in St. Thomas and St. Croix. This project is a collaboration with the Illinois Institute of Technology’s Robert W. Galvin Center for Electricity Innovation. The project will reduce the University’s dependence on fossil fuels by 50 percent by 2015 and produce 3.5 million kilowatt hours annually. Energy prices in the Virgin Islands are four to five times higher than those in the continental United States.

President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities.

USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values. President Obama and Agriculture Secretary Vilsack are committed to a smarter use of Federal resources to foster sustainable economic prosperity and ensure the government is a strong partner for businesses, entrepreneurs and working families in rural communities.

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