DES MOINES – State gas prices are approaching $4 per gallon for regular gasoline, up more than $1 per gallon from just one year ago, according to Minnesota/Iowa AAA.

A loan and grant program from U.S. Department of Agriculture’s Rural Development is seeking to add to the number of flexible fuel pumps, sometimes called “blender pumps” in Iowa, giving consumers the choice of filling their vehicles with higher blends of lower-cost ethanol.

Applications for this year’s Rural Energy for America Program administered by USDA-RD are due June 15.

“Iowa is already a leader in the country when it comes to biofuels, but we still have a relatively limited number of pumps that put out anything more than E-10,” said Bill Menner, USDA-RD state director.

“We have a potential great demand for E-15 and E-85, we just need more facilities that can offer them.”

USDA is providing funding for up to $61 million in guaranteed loans and $42 million in grants during 2011 through REAP, a national program.

Funds are available to help agricultural producers and rural small businesses develop renewable energy systems, make energy efficiency improvements and conduct studies to determine the feasibility of renewable energy systems.

A recently issued rule clarifies the definition of renewable energy systems to include blender pumps.

This clarification is intended to provide fuel station owners with incentives to install blender pumps that will offer Americans more renewable energy options.

The Obama Administration has set a goal of installing 10,000 flexible fuel pumps nationwide within five years.

REAP offers grants up to 25 percent of a project’s eligible costs. Guaranteed loans and a combination guaranteed loan and grant, can be as much as 75 percent of total eligible costs.

However, any purchases incurred prior to submitting a complete application are not eligible.

“USDA is working hand-in-hand with local partners and entrepreneurs to build the biofuels industry to create thousands of jobs growing and harvesting biomass, building and operating refineries, and transporting For more information contact (515) 284-4663.

USDA-RD has 11 offices across the state to serve the 1.7 million Iowans living in rural areas and communities. Office locations include the state office in Des Moines, along with area offices in Albia, Atlantic, Humboldt, Indianola, Iowa Falls, Le Mars, Mount Pleasant, Storm Lake, Tipton and Waverly.