FAIRBANKS - The federally funded Denali Commission is taking the unprecedented step of setting aside funds specifically for alternative energy projects in rural Alaska in a move to help offset soaring fuel costs.
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The commission is offering $4 million in grant money for alternative energy projects and $4.4 million for efficiency related projects. All the projects must be located in rural areas.
"We need to be in the game and to be leading in this arena," George Cannelos, the commission's federal co-chair, said Thursday. "I think we'll be losing communities if solutions aren't found."
The agency sent out a request for proposals last week. Hydroelectric, solar and geothermal power projects will be considered, as will projects that replace diesel generators with local sources of coal or natural gas.
The state is contributing an additional $1 million in funding for alternative energy projects located anywhere in the state through the Alaska Energy Authority, a public corporation.
Gov. Sarah Palin last week proposed putting $250 million into an alternative energy fund to support hydroelectric, wind, solar and other energy projects.
The energy authority has provided grants and loans for alternative energy projects in the past, including one to use geothermal power at the Chena Hot Springs Resort, but has never participated in a request for a wide range of alternative energy projects, according to Peter Crimp, head of AEA's alternative energy programs.
"I think there's an overall policy direction from the Palin administration to start allocating resources to cost-effective projects," he said.
All projects will be required to demonstrate long-term net savings to the community and acquire additional financial backing.
Pamela A. Miller of the Fairbanks-based Northern Alaska Environmental Center called the funding a "good first step" for the state, but said much more funding was warranted for projects that can reduce energy costs and greenhouse gas emissions at the same time.
"There's so much potential," she said, "in some urban projects, but especially in the rural areas."