Thomas M. Hunter, Executive Director
Presentation to Governors' Quorum Meeting
Washington, DC
February 25, 2007

I am pleased to provide you with a report of the Commission's accomplishments for fiscal year 2006. This has been a great year once again, and we owe a big vote of thanks to all of our partners.

The Commission approved 414 non-highway projects during the year, totaling $61.8 million in funding as it implemented the four main goals of our five-year strategic plan. The Commission approved these goals in 2005. They are:

1. creating jobs
2. increasing competitiveness
3. enhancing infrastructure and;
4. building the Appalachian Development Highway System.

1. created or retained nearly 29,000 jobs
2. trained over 17,500 students in new job skills
3. bolstered the Region’s physical infrastructure by directly investing $28 million which leveraged $130 million in other public funding for infrastructure.
4. brought new or improved water systems to over 30,000 households, many for the first time.
5. We also opened 30 more miles of the Appalachian Development Highway System to traffic in four states: Alabama, West Virginia, Mississippi, and North Carolina. We now have 2,645 miles of the 3,090 mile system open to traffic or under construction.

Every ARC dollar goes a long way. Across all ARC goal areas, we attracted $194 million in additional public funding for the fiscal year, a ratio of 3 to 1, and $713 million in leveraged private investment, a ratio of more than 11 to 1. This represents an increase of 36% over last year.

Forging partnerships remains key to our efforts, and the number of our partners continues to grow. They include: Microsoft, the eBay Foundation, the Centers for Disease Control and Prevention (CDC), the National Geographic Society, the Federal Office of Rural Health Policy, and the U.S. Department of Agriculture.

We also continued to boost telecommunications and technology, investing $5.9 million to support distance-learning, business applications, and broadband access.

A focal point of the Commission's work in FY 2006 was the development of an "Energy Blueprint" which you, the governors and the federal co-chair mandated at last year's quorum meeting.

As the nation's energy needs continue to grow, you recognized the unique role ARC can play in today's energy equation. Our niche is jobs -- we want to compliment other agency efforts and ensure that our Region gets its fair share of the jobs that will be created in the energy sector. Our efforts are needed to help make that happen.

Appalachia is rich in energy resources.

1. 1/3 of our nation’s coal comes from Appalachia
2. 15% of the nation’s electrical output comes from Appalachia which is just 8% of the population

The energy blueprint we created in response to your mandate provides a strategic framework for developing the full economic potential of these resources to create jobs.

In producing this blue-print we took three steps.

First, we commissioned a series of research studies to assess the nation's and Region’s renewable and conventional energy sectors.

Second, we convened three public roundtables in the Region, where a total of more than 100 industry experts, educators, government officials, and entrepreneurs discussed energy opportunities, challenges, and strategies.

Third, we created the Energy Advisory Council with representatives from the energy offices of each of the 13 Appalachian states and our local development districts to formulate energy strategies for the Region. The resulting blueprint was announced by Governor Fletcher and Federal C-Chair Pope at our fall conference last year. It identifies an overarching goal to develop the Appalachian Region's energy potential and three strategic objectives.

Objective 1: Promote energy efficiency…
This is the low-hanging fruit on the energy tree where we make the most of what we have. There are jobs to be created in the energy efficiency sector -- in audits, retrofits, and housing maintenance and construction just to name a few examples.

Objective 2: Increase the use of renewable energy resources…
Renewable energy has huge possibilities. We are still only in the beginning stages of tapping into the job creating potential of biomass, wind, and solar power.

Objective 3: Support the development of conventional energy resources…
Conventional energy, especially coal, remains our mainstay. But there are exciting clean coal technologies that will help to preserve our environment and employ many new workers.

Energy is a broad, complex area -- we aren't the Department of Energy or the Department of Agriculture.

But we can be a catalyst for creating jobs in the Region’s expanding energy sector.

We believe there will be many opportunities to do this in the coming year.

We are looking forward to

1. expanding pilot efforts that show how to boost energy efficiency in our communities
2. sponsoring a matching grants competition promoting energy renewables and efficiency
3. holding a conference to collaborate on clean coal technologies and expanded uses of our coal resources.

Making the most of Appalachia's energy resources represents one part of building our economic future. Through this blueprint, you, the governors and the federal co-chair are helping ensure that this future will be a good one.

Thank you.