ENERGY : Utilities Study Ways to Harness the Wind : California is the leader. Declining costs, improved technology add to appeal.

Pioneered in California, wind-generated electrical power is starting to spread to other sections of the United States that have the potential to harness this most elusive of resources.

The Midwest in particular has “massive potential” for making use of the alternative energy resource because of its high winds, said Samuel D. Rashkin, technology transfer manager of the California Energy Commission, who has studied the economic feasibility of wind power in the state.

The Iowa-Illinois Gas & Electric Co. and the Livermore-based U.S. Windpower Inc. currently are studying a plan to jointly develop wind-power projects to generate electricity for local utilities in the Midwest, according to a spokeswoman for the Davenport, Iowa-based utility. The joint venture, should it proceed, could be the largest wind-power development in the country outside of California.

“What you are seeing is a fundamental change in the attitudes of utilities toward wind technologies,” said Randall Swisher, executive director of the American Wind Energy Assn.

Utilities were slow to explore the energy alternative in part because of mistakes made in the formative years of wind technology, he said. Now, he contends, improvements in the technology have made wind-energy cost effective in the long term. The changes are starting to erase the lingering negative image of wind technology.

Noting that the costs of producing electricity from wind have gone down from 25 cents a kilowatt hour in 1981 to 6 to 8 cents today, he said: “By the end of the 1990s, I would expect wind to be the least costly resource for any utility with a good wind regime.”

BACKGROUND: California produces almost 80% of all the wind-energy produced in the world, down from 85% two years ago. Ninety-six percent of the state’s wind-generated power comes from three areas--Altamont Pass near San Francisco, San Gorgonio Pass near Palm Springs and Tehachapi Pass near Mojave--where natural topological “bottlenecks” in the coastal mountain ranges produce optimal wind conditions. Giant windmills stud the hillsides in those areas, like gigantic outdoor fans.

Experts say a dozen states have even higher but as yet untapped wind-energy potential. Most are in the Midwest.

Wind generates about 1% of California’s electricity, enough to meet the annual residential demand for a city the size of San Francisco. Plants in the state produce almost 1,600 megawatts a year. In Hawaii, the state making the next largest use of wind technology, only 35 megawatts are produced.

Other smaller plants are in operation in Oregon, and Minnesota recently made a commitment to develop a 10-megawatt plant, Swisher said. “There also is substantial interest in the Northwest and growing interest in New York,” he said.

Development of wind energy in California was encouraged by federal tax credits and by the utility commission’s intervention to establish long-term fixed purchase prices that virtually guaranteed that wind companies would profit from the sale of electricity to utilities. When the tax credits expired in the mid-1980s, many people predicted the demise of the wind energy market. They have been proved wrong.

A study by the California Energy Commission says 44% of the state’s wind turbines were installed after 1986, when the tax credits expired. “This indicates that a substantial amount of the total installed technology base was developed based on revenue streams from power sales, rather than tax incentives,” the study says.

PROBLEMS: This is not to suggest that the energy source is free of problems, not the least of which is the wind’s relative lack of reliability. Unlike most other sources of energy, wind-generated power is subject to the vagaries of weather.

Rashkin noted, for instance, that in California the daily intensity and availability of wind power is not well-matched to the state’s peak demand periods.

It is possible to store energy produced by wind for use during peak-use periods using any of several methods, but such technology adds to the costs and presently is too expensive, he said.

Wind energy proponents favor changes in the tax structure and in regulatory systems that they contend now give unfair advantages to more traditional forms of energy, such as fossil fuels. Furthermore, Rashkin argues that the costs of further developing wind technology should be balanced against the hidden health and environmental costs of coal and gas.

And, even without storage capabilities, Swisher said, wind provides a clean, cost-effective way of diversifying the nation’s energy resources.

“All the utilities around the country and the world are looking at the potential of the wind market,” Rashkin said. “They’re going to completely overwhelm anything that’s been done in California.”