High Energy Cost Grants

The High Energy Cost Grant Program (HECG) for Fiscal Year 2025, administered by the Rural Utilities Service (RUS) under the U.S. Department of Agriculture (USDA), aims to support communities where residential energy costs are exceptionally high, defined as 275 percent or more of the national average. These grants fund projects that acquire, construct, extend, upgrade, or improve energy generation, transmission, or distribution facilities. Additionally, grants can support renewable energy systems and energy efficiency improvements. The program emphasizes creating better market opportunities, advancing equity and inclusion, and addressing climate change and environmental justice. For FY 2025, the program anticipates approximately $8 to $10 million in funding, with individual grants ranging from $100,000 to $3,000,000. Eligible applicants include state and local governments, non-profits, for-profits, tribes, individuals (if the project benefits the broader community), and other public or private entities authorized under the Rural Electrification Act. Eligible communities must meet specific benchmarks for high energy costs based on residential expenditures for electricity, natural gas, fuel oil, or propane. Projects must primarily serve eligible communities and address critical energy infrastructure needs without being limited to individual households or businesses. There are no mandatory cost-sharing or matching requirements, but additional contributions may enhance the project’s competitiveness. Applicants must submit their proposals through Grants.gov by February 28, 2025, for electronic submissions, or ensure paper applications are postmarked by the same date. Applications must include standard federal forms, project narratives, environmental questionnaires, and detailed budget justifications. Proposals must demonstrate technical feasibility, a well-defined management plan, financial capability, and alignment with state, tribal, or local rural development initiatives. Evaluation criteria focus on the project’s technical merit, community impact, organizational capacity, financial feasibility, and alignment with program priorities. Points are awarded based on factors such as community needs, project design, management plans, organizational experience, and reporting structures. Additional priority points are available for projects addressing rural economic development priorities, serving smaller or remote communities, supporting energy efficiency, or addressing extraordinary circumstances such as disasters or imminent hazards. Successful applicants will enter into a grant agreement with the RUS and must comply with federal requirements, including environmental reviews, financial reporting, and performance monitoring. Awards are expected to be announced within six months of the application deadline, contingent upon the completion of environmental and historic preservation reviews. For further information or assistance, applicants are encouraged to contact RUS program representatives or consult the detailed application guide provided online.