COLUMN ONE : A Second Wind for Turbines : Gone are the clunky propellers and notorious tax scams of old. Streamlined machines are generating low-cost electricity and showing promise for investors and developing nations.

In the blustery throat of San Gorgonio Pass, on the outskirts of Palm Springs, rank after rank of state-of-the-art wind machines are rapidly turning the breeze into an everyday source of electricity.

Largely unnoticed, wind power has come into its own, with a new generation of machines that make it the first renewable energy--from solar, wood waste or other environmentally benign sources--cheap enough to compete with low-cost fossil fuels.

“It’s not like the old days,” said Neal Emmerton, executive director of the Desert Wind Energy Assn. “There are an awful lot of good turbines out there.”

Clunky machines with blades the length of a football field--experiments built by the aerospace industry--have long since been supplanted by technology that is both economical and dependable.

Entrepreneurs who in the 1970s slapped together wind-energy systems as notorious tax scams have been replaced by companies taken seriously on Wall Street and in the electric utility industry.

And since 1981, the price of electricity from wind has plunged more than 80%, with the new turbines costing an average of 8 cents to power a U.S. home for an hour. And even cheaper machines are on the drawing boards.

“Wind is poised to become one of the lowest-cost sources of electrical energy,” said Edgar DeMeo, a renewable-energy expert at the Palo Alto-based Electric Power Research Institute (EPRI), the research trade group for the nation’s utilities.

Some critics still object to the sight of oversized propellers along a desert skyline, while others worry about the mysterious collisions of birds and blades. Other drawbacks: The windiest areas are often a long way from power-hungry cities, and the wind doesn’t blow all the time.

But an ancient preoccupation with capturing power from the breeze--from sailing ships to windmills--is now a daily reality, with more than 17,000 wind turbines making electricity from California to New York, Minnesota to Texas. Thousands more generate power in Europe and elsewhere worldwide.

“Basically, we’ve learned how to do it,” said Curt Maloy, a vice president of New World Grid Power Co., a wind-farm developer in Lime Rock, Conn.

New World expects to replace older turbines in San Gorgonio Pass with machines from a thriving international marketplace in wind technology--in this case, from Enercon, a German manufacturer, or Vespas Wind Systems of Denmark.

The electric power business faces daunting uncertainty these days, with deregulation looming throughout the developed world. And energy-saving campaigns and a slowed economy in the early 1990s left most U.S. utilities with more power plants than they will need until the end of the century.

Still, both advocates and more-conservative utility experts say they believe that wind power has an expansive future.

Up to 5% of the new generating-plant capacity in the next decade--an immense amount of electricity in practical terms--could be fueled by wind, estimates Earl Davis, EPRI’s manager of wind-power integration. Wind power now produces less than 1% of the nation’s electricity.

The Department of Energy recently forecast a 600% increase in wind-energy use in the nation in the next 15 years. By the middle of the next century, the wind could be producing 10% of U.S. electricity--as much as hydroelectric dams today--predicts Carl J. Weinberg, president of the Washington-based American Wind Energy Assn.

“This isn’t just a little novelty, with wind here and there,” said Weinberg. Worldwide, he said, “it turns out there are probably two or three times more wind resources than people used to think there was.”

In fact, during the next few years, wind energy may be most attractive overseas. Developing countries face explosive demands for power, but many lack their own coal or natural gas. With wind, the fuel is domestic and free once the machines are paid for.

This quiet return to respectability brings wind energy full circle from the turn of the century, when small wind-driven generators--invented by the Danes--provided the sole electricity available to most U.S. farmers.

These small home machines stopped whirling by 1940, as subsidies from the Rural Electrification Administration, part of President Franklin D. Roosevelt’s New Deal, gave low-interest loans to rural cooperatives to march power lines out to farms and remote homes.

But the oil shocks of the 1970s spurred a search for domestic energy sources to replace imported oil. Environmentalists and politicians also forged government support for cleaner-burning fuels.

Synthetic fuels, clean coal, solar thermal, solar photovoltaic, biomass, geothermal, ocean wave and other potential energy sources have since been tested, developed or discarded, particularly in California, which leads the world in alternative-fuel use. Wind power produces about 1.2% of the state’s electricity.

Even wind energy’s critics admit that it has come a long way compared to its rivals since the days when alternative energy was routinely dismissed as the utopian “wood chips and windmills” of former California Gov. Edmund G. (Jerry) Brown Jr. and other advocates.

“My critics of the early 1980s are proven dead wrong,” Brown mused recently. “The technology and the know-how are now in place to make a major shift to renewable energy, and I’m glad California was part of it.”

How big this shift could be is still unclear, however.

The technology requires relatively high up-front investments because roughly 80% of the cost of wind power is the machinery, not daily operating expenses. The newest machines run from $200,000 to $400,000 per turbine.

Also, as Jim Birk, manager of renewable and hydro energy at EPRI, pointed out, “wind is not necessarily located where your people are” and may not blow at times when the electric grid most needs more power. That means wind is unlikely to be the primary source of electricity in most areas.

One of the touchiest issues surrounding wind energy is the mysterious death of hundreds of birds of prey killed by turbine blades.

In the mid-1980s, red-tailed hawks, American kestrels, golden eagles and other birds began showing up dead beneath turbines in the big wind farms of Altamont Pass, east of San Francisco Bay. All U.S. birds of prey are federally protected under migratory treaties, so environmentalists and government wildlife agencies saw trouble--particularly as more and more wind farms were being planned.

At Altamont, the California Energy Commission estimates that more than 300 raptors a year are being killed. Bird deaths don’t seem to be a problem at California’s other two big wind-farm regions, the Tehachapi and San Gorgonio passes, although surveys have yet to confirm this. And farmers who lease their land to wind-power companies doubt so many are being killed.

“I’ve seen more birds killed by these big power lines than the windmills,” said Phyllis Castello, an Altamont Pass rancher with 400 turbines on her land.

Whatever the numbers, some experts suspect that the raptors may ignore the spinning blades when they close in on prey. If so, migratory flyways--including parts of Altamont Pass--may not be suitable for wind machines.

Others think that contrasting colors, or noise, or supporting towers that discourage perching could be used to ward birds away. Kenetech Inc., the largest U.S. wind-power company, has spent more than $2 million on research and will try black-and-white patterns on its equipment this spring.

In the end, researchers believe the problem will be solved. “There’s a consensus that the industry isn’t threatened,” said Bob Haussler, manager of the California Energy Commission’s environmental protection office. “It could be constrained to some extent.”

Cows grazing below the turbines face no such risk. And some lucky ranchers and farmers already appreciate the royalties from wind--including growers in California, Germany, Britain, Denmark and the Netherlands.

How much do they make?

“My wife doesn’t think I should tell you,” said Robert A. Vieux, who has raised cattle and grain in Altamont Pass for more than 40 years. “But it’s better than sitting out there on the tractor.”

Paul Gipe, a Tehachapi researcher and author of the forthcoming “Wind Energy Comes of Age,” estimates that California landowners can earn $400 to $1,000 annually per machine--typically 2% to 5% of the gross revenue. The Worldwatch Institute in Washington estimates that 2 1/2 acres of windy Wyoming rangeland, worth as little as $100, could produce $25,000 worth of electricity annually.

At San Gorgonio Pass--one of the world’s largest wind-power sites--early opposition to the turbines has almost entirely disappeared, according to Palm Springs Mayor Lloyd Maryanov.

“I think we’ve moved past that,” Maryanov said. Some lingering critics want safeguards to prevent noise and visual pollution, but “it’s not a problem anymore,” he said.

The new round of development in the pass offers a snapshot of an industry that is growing rapidly, with strong international ties.

About 3,500 turbines, using 16 technologies, produce enough electricity to supply all home and industrial power needs of the Palm Springs area, population 90,000. And most of these will soon be replaced with a new generation of machines.

Zond Systems Inc., based in Tehachapi, has built two prototypes of a big turbine and has plans for an even bigger one. Zond recently signed deals to install its new turbines in Texas, Britain and India and is negotiating projects in Oregon and at least 15 countries. SeaWest Energy Group of San Diego has more than 900 machines in the pass, most of them Danish Micon turbines, and plans to replace them with new models.

And these days, much of this activity is being financed by major corporations.

The investment arms of Westinghouse Electric Corp., General Electric Co., John Hancock Mutual Insurance Co. and Allstate Insurance Co. have been attracted to wind energy--in part by a new federal tax credit of 1.5 cents per kilowatt-hour over the first decade of operation of new renewable-energy projects, part of the energy law passed during the George Bush Administration.

Earlier tax credits gave the industry a black eye. Many wind energy companies were formed in the early 1980s to exploit ill-designed state and federal investment tax credits, now long gone, that totaled a phenomenal 37.5%. In California, the state Public Utilities Commission also ordered utilities to buy the power, mandating a market. This lured legions of doctors, lawyers and other small investors.

But the early tax credits were based on the cost of a wind machine, not on the electricity produced. Half-baked technologies made as good a tax shelter as the best-engineered machines. The legacy was hundreds of idle wind machines and lots of bad press.

But in the end, EPRI’s DeMeo contends, the credits were a good use of public funds. “People took far too great a step in the late ‘70s, but what’s happened since is that people have taken smaller steps” and built a new industry.

“We were in it for the long haul,” said Stephen C. Rangel, controller of San Gorgonio Farms Inc. and Whitewater Energy Corp., two small companies that manage 272 turbines in the pass.

Today, investors in his wind farms--still mostly doctors, lawyers and small businesses--are making money, as are investors in companies that used more reliable systems.

The most prominent survivor is San Francisco-based Kenetech Corp., formerly U.S. Windpower, which has projects in the works from Costa Rica to Ukraine. Kenetech’s Northern California wind farm by itself could power the city of San Francisco.

In San Gorgonio Pass, Kenetech since 1991 has been buying up smaller companies’ contracts to sell electricity to Southern California Edison Co. Since 1993, it has been replacing these companies’ older turbines with its own new generation of machines.

Many utility analysts have especially high hopes for Kenetech. But skeptics also hover over the company, worrying about its new turbine technology, concerned that the leader could stumble.

“If Kenetech does not succeed, the whole industry is significantly tarnished in this country,” said Henry Hermann, a Dallas analyst with W. R. Lazard, Laidlaw & Mead, a large New York-based investment bank. Hermann recently issued a cautionary financial report on the company.

Component failures have ranged from blades that collapsed like lop-eared rabbits to hydraulic systems that froze in the Northeast winters.

The machines have had their start-up problems, said Kenetech President Gerald Alderson, resulting in 18 engineering changes at last count. But these “technical problems and glitches” have been worked out, he said. Doubts about Kenetech and the wind industry persist because people don’t realize how sophisticated the technology has become, he said.

“If on a Friday, Ford makes a car that’s a lemon, people don’t worry about whether cars work,” Alderson said. For wind, “. . . that underlying gut confidence isn’t there yet.”

Meanwhile, Kenetech’s blade manufacturer blames the early failures on a manufacturing technique now abandoned. And Niagara Mohawk Power Corp., the New York utility that had trouble with two of the new Kenetech turbines in winter, also considers its problems solved.

“We’re experiencing good performance this winter,” said Niagara Mohawk spokesman Gerald Rockower, who said the utility expects to be operating 20 wind turbines by 1997. “There are really no technical considerations there.”

Investors are also unperturbed. Kenetech built 463 of its $300,000 turbines in 1994 and predicts construction of 1,100 this year.

Stamford, Conn.-based Greyrock Capital Group Inc., a subsidiary of NationsBank Corp., the third-largest U.S. bank, has about $22 million invested in loans and equity in Kenetech projects.

“We’re getting paid,” said Greyrock Vice President Frank Rivera. “That’s usually a good indication that projects are performing.”