Jul 10 - McClatchy-Tribune Regional News - Wesley Loy Anchorage Daily News, Alaska

State lawmakers here for a special session on the natural gas pipeline are quietly considering another blockbuster energy idea -- plowing nearly $21 billion into "renewable" and "alternative" energy projects.

But some legislators say a dirty word, coal, appears all through the proposed legislation that's making the rounds in the Capitol.

The bill, which has not yet been introduced and is labeled "work draft," has language saying the intent is for lawmakers to contribute $20.75 billion to a renewable and alternative energy grant fund over the next five years.

The money, presumably, would come from the state's huge oil revenue surpluses, assuming they continue.

The draft legislation says energy projects such as a plant that "produces ultraclean fuels from coal" would be eligible for funding.

The main backers of the coal provision are local officials from the Fairbanks area, where skyrocketing energy prices have people alarmed, said House Speaker John Harris, R-Valdez.

Harris said his office worked on the draft legislation with Fairbanks North Star Borough Mayor Jim Whitaker and others.

He couldn't say for sure, but Harris expects the draft bill to be formally introduced at some point during the 30-day special session that began Wednesday.

But some lawmakers criticized the legislation, saying that most people understand renewable and alternative energy to include wind, solar, geothermal, hydroelectric, tidal or biomass projects -- not coal.

"Coal is not renewable energy and by any fair definition it's not really alternative energy," said Rep. Les Gara, an Anchorage Democrat.

House Minority Leader Beth Kerttula, D-Juneau, said she was struck by the staggering dollar figure in the bill -- $21 billion.

"Yeah, that's a rather large number, to put it mildly, even with our surpluses," she said.

Two Fairbanks lawmakers, Republican Reps. Mike Kelly and Jay Ramras, said Wednesday they had not yet seen the draft legislation.

But Kelly, formerly chief executive of the electric power utility in Fairbanks, said he likes the idea of using known technology to convert the state's abundant coal into a liquid fuel that local consumers could use.

"We've got a hundred-year coal supply for the nation in Alaska," he said.

Ramras said a big worry is finding alternative power supplies for Eielson Air Force Base near Fairbanks. He said a recent federal law requires Air Force bases to use more alternative energy sources.

He said Eielson is at risk of landing on the military's base-closure list because of high costs in Fairbanks.

Lawmakers are meeting in special session to consider bills related not only to a natural gas pipeline from the North Slope to Alberta, Canada, but other energy-related legislation including a proposed $1,200 "resource rebate" for each Alaskan.

State Natural Resources Commissioner Tom Irwin said Wednesday he also had not yet seen the draft legislation on renewable and alternative energy grants, though he'd heard about the $21 billion figure.

"I didn't even know it was all typed up as a bill yet," he said.

Irwin declined to comment on the bill before reading it closely. However, he said the Palin administration believes the state needs to move into more renewable and alternative forms of energy, especially now that it has billions of spare dollars to invest.

Whitaker, the Fairbanks borough mayor, could not be reached for comment Wednesday.

But Harris said he's encouraged Whitaker and other Fairbanks officials to come to Juneau to lobby for the draft bill.

Gara said he's not necessarily opposed to using coal-based energy "as a last resort."

He said his main objection to the draft bill is that steering money to coal projects will detract from the focus on true and cleaner renewable and alternative energy ideas.

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Find Wesley Loy online at adn.com/contact/wloy or call him in Juneau at 1-907-586-1531.