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Murkowski informed Ketchikan city Mayor Bob Weinstein that he would not support a $20 million debt repayment request if one leg of the project were to move forward.

Weinstein said he and other members of the Four Dam Pool - a group of Southeast communities seeking to create a hydroelectric power grid - met with the governor recently.

That is one leg of the power grid that would link Ketchikan to Wrangell and is the only section ready for construction, said Weinstein.

"That was not very good news," Weinstein said. But, he said, "there are other avenues that might be open."

Murkowski supports efforts to build a Southeast intertie that could one day provide cheaper power for Panhandle communities, but the state faces a chronic budget shortfall and cannot afford the expense of such a project, spokesman John Manly said.

"He's still very supportive of the project. But when we are cutting back on state government, we're trying to find a way to reduce spending below last year's level ...," Manly said Friday.

The governor will work to find other funding sources for the project such as the joint state and federal Denali Commission or through other federal programs, Weinstein said.

Congress is considering an energy bill that would give the Denali Commission $50 million a year for the next decade for power projects, but that measure has not passed.