Senate denies Obama bid to axe rural energy grants

High Energy Cost Grant Program supports rural electricity and renewable energy in Alaska and Indian reservations; Senate vote defies Obama and McCain budget cuts, citing Appropriations oversight and duplicative loan guarantees debate.

The Senate broke with Barack Obama 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 even as the House energy-water spending moved forward elsewhere in the budget.

The program provides money for electricity generation projects in places such as Indian reservations, rural cooperatives and, especially, Alaska, during debate over a massive energy bill in Washington that year.

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 — and while senators pursued a slimmer energy bill earlier this session, Obama scored a big win just recently 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, and his nuclear reactor push underscored his energy priorities at the time. 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 clean energy plans were central to the debate as 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 Alaskan villages.

The House already has rejected Obama's effort to kill a $400 million program that helps states with the cost of incarcerating criminal illegal immigrants and has voted to keep in place the World War II-era LORAN-C maritime navigation system that Obama wanted to ax.

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