Senate denies bid to ax rural energy grants

Posted: Tuesday, August 04, 2009

WASHINGTON - The Senate broke with Barack Obama on Monday as it voted to keep alive a grant program to help people in rural areas receive reasonably priced electricity despite the president's demand to kill it.

The 55-41 vote represented another win for the old-school Appropriations Committee over Obama and presidential election opponent Sen. John McCain, R-Ariz., who backed Obama's effort to eliminate the Agriculture Department's High Energy Cost Grant Program.

The program provides money for electricity generation projects in places such as Indian reservations, rural cooperatives and, especially, Alaska.

But the $18 million program made it onto Obama's roster of 75 recommended cuts or eliminations of so-called discretionary programs funded by Congress each year, totaling $11.5 billion. He announced the cuts in May to great fanfare, but Congress has mostly ignored them - though Obama scored a big win two weeks ago when the Senate cut off funding for the over-budget F-22 fighter jet.

McCain was again Obama's ally in trying to kill off the program. The White House budget office says it duplicates a loan guarantee program that achieves the same kind of results at no cost to taxpayers. He also said that $20 million worth of previously appropriated funds have yet to be spent.

Obama's budget mentions Alaska and Hawaii as the chief beneficiaries of the program, but Alaska GOP Sen. Lisa Murkowski reminded her colleagues that a dozen other states have benefited and that eight others have pending applications. And she said the grants can only go to areas where electricity costs are almost three times higher than the national average.

The program has funded projects such as providing wind and solar systems for 50 Navaho Nation homes, but at a cost averaging $16,500. More typical projects include replacing old power lines or inefficient diesel generators in Alaska villages.



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