Story last updated at 11/25/2008 - 9:32 am
Energy alternatives seek state funding
Project leaders fear oil price declines may lead to waning commitment
In the last year, rising energy prices have placed finding alternative energy sources for struggling Alaska communities at the top of the state's agenda.
The Alaska Energy Authority is sorting through requests for $450 million to fund alternative and renewable energy projects. They've got $100 million to spend on wind, biomas, tidal, geothermal and even the rare Alaska solar project.
But now oil prices are plummeting and have fallen by $100 a barrel since this summer. Prices on Friday came in at $44.54 a barrel for Alaska North Slope crude. It sold at $144.59 a barrel on July 3, its all-time high, according to Bloomberg News.
The drop has those who are trying to help struggling rural communities worried that the state's commitment to alternative and renewable fuel will wane, as it has in the past.
"I'm very concerned that if the state has less money, they're going to cut back on these kinds of programs," said Jodi Mitchell, executive director of the Inside Passage Electric Cooperative, the Juneau-based, member-owned utility trying to bring affordable hydroelectric power from Alaska Electric Light & Power Co. to Hoonah.
IPEC is part owner of Kwaan Electric Intertie Cooperative, a joint operation with AEL&P.
Kwaan has applied to the Alaska Energy Authority for $37.5 million to fund construction of the intertie.
Other local projects seeking the money include the City and Borough of Juneau, asking for $1.95 million for a ground-source heat pump for the new aquatic center.
An earlier program provided $513,000 for a ground-source heat pump at the Juneau International Airport. That grant is for half the total cost of the project and is scheduled to be awarded in early December, city officials said.
A company called Alaska Recycling Energy LLC wants to explore creating energy from waste gas at the Juneau landfill. That project has no dollar amount, but the same company is seeking $200 million for a feasibility study of a similar project in Anchorage other communities around Alaska.
Another company is seeking to do a feasibility study on tidal energy projects in Gustavus, Angoon, Wrangell and Nikiski. That project has no dollar amount and is the only one of its kind in the state.
Alaska Energy Authority spokesman Karsten Rodvik said the Alaska Legislature earlier this year allocated $50 million for alternative energy projects during the regular session, but when energy prices continued to climb during the summer it added another $50 million.
The projects are going through a series of reviews to ensure they can work and can be accomplished quickly.
"When that's done we'll take a look at how it is going geographically, regionally, to make sure one region isn't going to get a whole bunch of new funding" while others get ignored, Rodvik said.
Mitchell said she's worried about the Hoonah intertie because new engineering estimates show its cost climbing to more than $50 million.
"I kinda feel like if it doesn't happen now, it might never happen, especially with the oil prices in the tank right now," she said.
IPEC and others have been working on planning the intertie since it was first conceived in 1998, Mitchell said. If they can get the requested amount they can probably come up with other grants or loans elsewhere to make it happen, she said.
Rep. Les Gara, D-Anchorage, said he was concerned that with declining oil prices the Legislature would quickly forget the trouble people had with being able to afford to heat their homes and waver on its commitment to alternative fuel.
"I think people need to stop legislating based on today's price of oil," he said.
"Right now we're well situated, with over $7 billion in Constitutional Budget Reserve savings, to solve these issues," he said.
A first round of decisions on grant awards is expected at a meeting of the Legislative Budget & Audit Committee in December.
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