High Energy Cost Grants

What does this program do?
Assists energy providers and other eligible entities in lowering energy costs for families and individuals in communities with extremely high per-household energy costs (275 percent of the national average or higher.)

Who may apply?
Most retail or power supply providers serving an eligible rural community, including:

• State and local governmental entities
• Federally-recognized Tribes and Tribal entities.
• Non-profits, including cooperatives and limited dividend or mutual associations
• For-profit businesses

What is an eligible community?

Eligible communities must demonstrate annual average household energy cost exceeding 275 percent of the national average under benchmarks published in the 2025 High Energy Cost Grant Funding Opportunity Announcement.

Eligible areas must be located in the United States, U.S. Territories, or areas eligible by law to participate in USDA Rural Utilities Service Programs.

What kind of funding is available?

• Grants

How may the funds be used?
To finance the acquisition, construction or improvement of facilities serving eligible communities, including:

• Electric generation, transmission and distribution facilities, including:
  • Equipment, materials and activities
  • Land or right-of-way acquisition, professional expenses, engineering and permitting costs
• Natural gas distribution and storage facilities, including equipment, materials and activities
• Petroleum product storage and handling facilities, including equipment, materials and activities
• Renewable energy facilities, including solar, wind, hydropower or biomass technologies used for on- or off-grid:
  • electric power generation
  • water or space heating
  • process heating and power
• Backup or emergency power generation or energy storage technology, including generation equipment installed on consumer premises

Implementation of initiatives such as:

• Energy efficiency improvements and conservation measures ( i.e. weatherization of residences and community facilities)
• Programs encouraging the use of energy-saving appliances and devices
• Programs aimed at improving the quality and cost of energy service

For additional details, see the Code of Federal Regulations 7 CFR 1709

What is the national average annual home energy cost?
For the purposes of this program, the high energy cost benchmarks effective for 2025 High Energy Cost Grant Funding Opportunity Announcement:

• Electricity  $3,795 ($0.4494 per kilowatt hour)
• Natural gas  $1,733 ($38.03 per thousand cubic feet)
• Fuel oil  $3,366 ($11.33 per gallon)
• LPG/propane  $2,021 ($6.88 per gallon)
• Total household energy $5,181 ($67.46 per million Btu)

What is the current status of the program and who currently participates?

• Our Project Summaries provide a list of participants

Who can answer questions about this program?

• For other questions, contact  the Rural Electric Program staff

What governs this program?

• Rural Electrification Act of 1936, as amended in 7 U.S.C. 901
• Code of Federal Regulations 7 CFR 1709

Why does USDA Rural Development do this?
This program helps to offset extremely high household energy costs in areas where local conditions cause energy costs to exceed 275 percent of the national average. This type of assistance increases economic opportunity and the quality of life in rural communities nationwide by maintaining a seamless electric network for all Americans, regardless of where they live.

NOTE: Program details may change over time. Before you begin an application, please confirm you have the most current information by emailing Rural Electric Program staff or consulting the program instructions listed in the section above titled "What Governs this Program?"