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Unfortunately DOW does not support alpha channel that way. You will have issues with the alpha leaking to models stepping onto them or adjunction to them. Best to use decals.
If you still want to try the model approach, then convert manually to DDS with the texture tool and convert only to DXT1 but can't assure you will be without issues. Because again, DOW1.
Now for your script question, I am afraid that is not possible at all.
Best of luck to you.
