Juneau (Platts)--20Feb2009

Alaska legislators Friday approved a $100 million package of small
renewable energy projects -- a mixture of wind, solar, small hydro and biomass
projects mostly in small, remote villages now dependent on diesel-powered
generation.

The 77 projects were developed by the Alaska Energy Authority with local
communities, an agency spokesman said. There were concerns earlier the
legislature might delay the projects because of sharp reductions in state oil
revenues.

The AEA expects to award grants for the projects later this spring, the
spokesman said.

The AEA is working on a range of other renewable and alternative energy
projects near Alaska's major communities, but the small project program is
intended small villages in remote areas where diesel fuel for power generation
costs up to $8/gal.

In a related development, Governor Sarah Palin has recommended a
reduction in a proposed second phase of the renewable energy program because
of reduced oil revenues to the state. The state had planned to fund $50
million in additional projects this year but in a revised spending plan
submitted to the legislature Thursday the governor recommended the 2009
appropriation be pared to $25 million.

--Tim Bradner, newsdesk@platts.com