Alaska's diesel-to-renewables fund reopens, but the money reaches few

Hundreds of Alaska communities off the road system run on diesel hauled in by barge, at prices locked in before the fuel arrives. The state's main tool for getting them off it can pay for only a handful of projects a year — and a new application round just opened for the communities hoping to make the cut.

The Alaska Energy Authority opened Round 19 of the Renewable Energy Fund on July 13, with applications due September 11. Rural utilities, local governments, and tribal entities can seek grants to build wind, solar, hydro, and other renewable projects that reduce how much diesel they burn and how exposed they are to the price on the next barge.

Far more communities want the money than can get it. AEA doesn't award the grants itself; it ranks projects and sends the list to the Legislature, which decides how far down to fund. In Round 16, lawmakers put up $10.5 million and paid for five projects — then AEA went back the following year seeking money for the 19 it had recommended but couldn't fund. This past session, the Legislature allocated $9.3 million, enough to reach the top nine on the ranked list, Senator Bert Stedman said in May budget remarks.

For the more than 220 communities that barge in fuel each year, every gallon of diesel a wind turbine or solar array displaces is a gallon whose cost no longer rides on the next delivery. With more eligible projects than dollars, though, most communities that apply this round will not come away with an award.