"We think that the growth prospects are excellent for a number of reasons," said Steven Eschbach, a spokesman for FuelCell Energy Inc., which had revenues of $31 million as of Oct. 31 last year. "We're seeing increased interest."

Two projects in the Northeast, one in Connecticut and another on Long Island, could provide a boost to the industry, helping it bring unit costs down by ramping up volume and creating economies of scale, said Kenneth Reifsnider, director of the Connecticut Global Research Center at the University of Connecticut in Storrs. Eschbach agrees.

In Connecticut, the state government is pushing utilities to contract for 100 megawatts of electricity from renewable resources, which could include fuel cells, by 2007.

The state's utilities now arrange to buy electricity from providers rather than operate the plants themselves, but the state government initiative could put them back into the business of generating power from renewable resources, said Mitch Gross, a spokesman for Connecticut Light and Power. Utility executives are very interested in fuel-cell technology, he said.

The Long Island Power Authority (LIPA) is in the process of selecting a company to build the world's largest fuel cell power plant, which would provide 10 megawatts of electricity. The plant would be located on a large site owned by the utility in West Babylon, and the utility expects to name the contractor by the end of the year, said Michael C. Lowndes, a LIPA spokesman.

Fuel cell plants aren't noisy and can be placed closer to users on the electrical grid, Lowndes said.

Fuel cells produce electricity at a higher cost than typical generation methods, but the technology produces no pollution other than carbon dioxide and water.

The cells can run on hydrogen or other fuels, such as natural gas and propane. A beer company has one that runs off of gas generated in the brewing process. Another runs off of waste gas from food production, gas escaping from a coal mine and a project sponsored by the U.S. Navy uses marine-grade diesel fuel.

Connecticut stands to benefit from advances in the fuel cell industry, Reifsnider said.

"We have the most fuel cell companies and fuel cell employees of any state in the union," he said.

One of FuelCell Energy's biggest rivals is also based in the state - UTC Power in South Windsor, a division of United Technologies Corp. The two companies are not only the chief rivals for the West Babylon contract - they are probably the only companies in the field that could take on a fuel cell project of that size, said Nigel Sammes, professor of mechanical engineering at the University of Connecticut school of engineering in Storrs.

Currently, the largest single fuel cell generation site is the 1-megawatt King County wastewater treatment plant in the Greater Seattle area of Washington. Wastewater treatment gas is used to provide fuel for the cells, which also generate heat that helps the wastewater treatment process, Eschbach said.

Connecticut Light and Power, which covers most of Connecticut and provides electricity to 1.2 million customers, has a peak summer demand of 5,401 megawatts. LIPA, which serves all of Nassau and Suffolk counties on Long Island and a small part of Queens in New York City, had a record summer demand of 5,267 megawatts on Aug. 5.

FuelCell Energy has 225 employees in its 72,000-square-foot Danbury headquarters and another 350 employees at its manufacturing plant at a 25-acre site in Torrington. The Danbury headquarters also includes the company's research division.

Founded in 1969, FuelCell Energy only did research until 2000, when it delivered its first commercial unit. Since then, the company has sold units with a combined generating capacity of 78 million kilowatt hours, Eschbach said.

The Torrington plant, now producing fuel cells accounting for 6 megawatts of electricity per year, has the capacity to ramp up production to 50 megawatts. That site could be expanded to produce 400 megawatts, he said.