News Release

Contact: Claiborne Crain, (202) 720-1255
Tim McNeilly, (202) 690-0498

USDA RURAL DEVELOPMENT GRANT TO HELP REMOTE ALASKAN COMMUNTIES SECURE ADEQUATE FUEL SUPPLIES

     WASHINGTON, September 21, 2001--The U.S. Department of Agriculture today announced the approval of a $5 million grant to the Alaska Energy Authority (AEA), a public corporation of the State of Alaska. AEA will use the funds to support their existing state-revolving loan fund, which provides low interest loans to remote rural communities to acquire adequate fuels supplies for local energy needs.

     "Expanding this successful and creative state initiative will help many of Alaska's more isolated communities gain access to reliable fuel supplies," said Agriculture Secretary Ann M. Veneman. "This partnership between the state of Alaska and the Federal government will help mitigate the impacts of energy costs on rural families, communities, and businesses."

     Congress created in 2000 the energy grant program, administered by the Rural Utilities Service, to assist predominantly rural communities with extremely high-energy costs. The grant funds will be especially important to rural Alaska, where AEA estimates nearly 182 communities, totaling over 54,000 residents, have been impacted by high-energy cost. In many areas of Alaska the only means of transporting bulk fuel is by air or water, adding to the overall cost of fuel.

     Per capita income in most of remote Alaskan communities is less than 75 percent of the national average. According to state surveys, average annual energy expenditure per household in rural Alaska is more than three times the national average. The retail delivered price of fuel oil in rural Alaska is 30 to 250 percent higher than the price in Anchorage, Alaska's largest city.

     AEA administers the existing bulk fuel revolving loan fund to help remote communities with populations of 2,000 or less finance the purchase of adequate bulk fuel supplies for the long winter season. Proceeds from retail fuel sales to customers will provide borrowers with the revenues needed to repay loans and replenish the revolving loan fund.

     USDA Rural Development serves as the lead federal entity for rural development needs, and administers program assistance through three agencies: Rural Housing Service, Rural Business-Cooperative Service, and Rural Utilities Service. Further information on USDA Rural Development can be obtained by contacting any USDA Service Center or by visiting USDA's web site at http://www.rurdev.usda.gov.

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