A small hydropower project near Tanacross is one step closer to fruition after receiving a half-million dollar federal grant. The Yerrick Creek Natural Energy Project aims to use renewable energy to replace thousands of gallons a year of diesel fuel used by the region. Download AudioAlaska Power and Telephone is partnering with the Village of Tanacross and the local Native corporation to build a small hydropower project on the Yerrick Creek.Because the project lies on Native and state-owned lands, project Manager Jason Custer says the company has sidestep expensive and time consuming federal permitting. Custer says the recent $500,000 federal grant will pay for power house equipment.The company’s received other federal and state grants, but more are needed, he says, if the project wants to reach the nearly $20 million cost.“We can’t do the project with just with private debt and equity alone. There’s also a need for grants to help drive the cost of power down.”Custer explains the project needs to demonstrate it can supply power more economically than the current cost of diesel fuel that powers the community today. Once the 1.5 megawatt project is up and running, he estimates it should cover 40 percent of the power needs of Tok, Tanacross, Tetlin, and Dot Lake for the next 50 to 100 years.“Right now those communities are 100 percent dependent on diesel-based generation of electricity,” he explains. “So this would be the first time they have access to renewable energy.”Custer says the region currently uses almost 400,000 gallons of diesel fuel a year. He hopes lawmakers see any loan to the project will be offset by lower rural power subsidies.