AEC Completes $530,000 Private Placement Financing with Institutional Investors; Funding to be used for certifying Hydrogen Production System.

Energy Editors/Business Editors

LAS VEGAS--(BUSINESS WIRE)--Dec. 29, 2003

Alternate Energy Corporation (OTCBB: ARGY) announced today that it has received $530,000 via a private placement with institutional investors. The proceeds are expected to be used to fund interim working capital requirements and for certifying the Company's Hydrogen Production System.

The financing includes the issuance of 1.06 million shares of restricted shares at $0.50 per share and 318,000 warrants exercisable over a 3-year period to purchase the Company's common stock at $0.85 per share. The Company shall have the option of calling any unexercised warrants once the registration statement is effective and the Company's common stock price exceeds $2 per share for 30 trading days. The company has agreed to register the shares with the Securities and Exchange Commission.

"The proceeds from this financing will help us certify our hydrogen technology through testing before governmental entities and leaders in the alternative energy field," said Blaine Froats, AEC's Chairman. "We have already made substantial progress towards this goal and are pleased to announce the first step towards funding this certification."

About Alternate Energy Corporation (AEC):

AEC (OTC Bulletin Board: ARGY) is an energy company committed to delivering innovative, practical and environmentally responsible fuel and power solutions to consumer, commercial and government markets. AEC owns an affordable, on-demand high-grade hydrogen production process that is expected to enable the hydrogen economy to replace the fossil fuel economy., AEC's inexpensive hydrogen production process has been recognized for its ability to overcome two major industry obstacles - affordability and safety. The hydrogen production system leverages a proprietary chemical process that yields fuel-cell-quality hydrogen from fresh or salt water, with no known harmful by-products. AEC's achievements are already profiled in a variety of "green energy" publications and broader press outlets. The company has been covered in Fuel Cell Today, Solar Daily, Live Power News, Canada's Centre for Energy, and a variety of news wires. AEC test results have been featured in CNN's Market Wire and the Toronto Star, who called the company's test results, "a new chapter in hydrogen production history."

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 ARGY's Securities and Exchange Commission filings, including Form 10-KSB 10-QSB and 8-K. Actual results may differ materially from management's expectations.