ATLANTA (AP) _ Leftover sawdust and wood chips will eventually provide electricity in Georgia under a deal state officials announced Thursday.

Oglethorpe Power Corp. plans to build as many as three biomass electric generating facilities in Georgia, with the first set to begin operation in 2014.

They will rely on timber byproducts that are abundant in the state. State officials said they would help meet the growing power needs in Georgia as its population continues to soar.

The power plants will provide baseload power to Oglethorpe's 38 member cooperatives, which supply electricity to nearly half of Georgia's population. But company officials said the biomass would provide only a small percentage of the company's total energy mix. The company currently uses coal, nuclear, natural gas and hydroelectric power to generate electricity.

Oglethorpe is eyeing five potential sites in Appling, Echols, Warren and Washington counties.

Gov. Sonny Perdue announced the company's plans Thursday in Gwinnett County.

"Georgia has the unique opportunity to expand our use of alternative energy, grow our economy and transform the way we provide energy to our citizens," Perdue said.

The plants will provide about 40 jobs apiece. Each plant will require between $400 to $500 million in capital investment.

Tom Smith, president and chief executive officer of Tucker, Ga.-based Oglethorpe, said biomass is the most promising alternative energy source for Georgia.

"Unfortunately, our state is a poor location for wind energy and only has a modest potential for solar," Smith said.

Southern states have shown signs of opening their arms to homegrown alternative fuels, spurred in part by gas shortages after Hurricanes Rita and Katrina led to a sharp rise in fuel prices. That has happened again after Hurricane Ike.

Georgia Gov. Sonny Perdue has pitched a plan to create a corridor of alternative fuel pumps along Interstate 75 and recently announced a venture to build the first wood-based ethanol plant in the state.

Other smaller biomass plants have announced plans to open in Georgia but officials said they did not believe any have gone online yet.

Oglethorpe will be exempted from paying sales and use taxes on the biomass materials they purchase for the generating facilities, under a state law designed to lure the plants.