AEC Announces Completion of $1.5 Million Private Financing.

BURLINGTON, Ontario -- CEO BLAINE FROATS: Placement Accelerates Key Initiatives

Alternate Energy Corporation (OTCBB:ARGY) announced the completion of a $1.5 million private placement with a group of institutional investors.

The financing consists of $1.5 million USD on a convertible note to 5 accredited investors, with warrants to purchase up to another $1.5 million within 90 days of the effective date of a registration statement, to be filed by AEC. The investors will also retain 1,762,570 warrants with an exercise price of $.40 per share, which will provide additional equity upon their exercise.

The proceeds will be used for the pre-commercial stage of operations, development of alpha stage units for initial customer prospects, and to support the Company's patent initiatives.

AEC's Chairman and C.E.O. Blaine Froats commented, "This recently completed financing accelerates a number of key initiatives for us, including the completion of the full design, assembly, and testing of our hydrogen production demonstration units, which will be used to power both the Internal Combustion Engine (ICE) and Fuel Cell platforms."

Froats continued to say, "AEC continues on its path towards commercialization of its hydrogen generator, and we continue to move forward, focusing on upcoming key milestones. The Company is positioning itself for significant advancements in the execution of its business strategy in the coming months."

About Alternate Energy Corporation (AEC; www.cleanwatts.com):

Alternate Energy Corporation (AEC) intends to provide a hydrogen fuel system that has mass-deployment economics and provides small-scale, on-demand distributed generation of electricity. The Company anticipates scheduling product demonstrations with key strategic partners in the first quarter of 2005, then shipping initial hydrogen production and electricity generation systems later in 2005. AEC's proprietary discovery in metallurgy permits a small-scale unit to generate hydrogen from an aqueous solution through a "green" system at a price competitive with the current fossil fuel kWh cost of energy.

Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, the ability to negotiate outstanding prior debts of acquired companies; properly identify acquisition partners; adequately perform due diligence; manage and integrate acquired businesses; react to quarterly fluctuations in results; raise working capital and secure other financing; respond to competition and rapidly changing technology; deal with market and stock price fluctuations; and other risks. These risks are and will be detailed, from time to time, in AEC's Securities and Exchange Commission filings, including Form 10-KSB 10-QSB and 8-K. Actual results may differ materially from management's expectations.