As the dot.com stocks begin to lose a “little bit of theirluster,” Wall Street investors quickly are setting their sights oncompanies that are involved in the development of fuel-celltechnology for the energy market, as well as the individualutilities that are “embracing” the new technology.

Investors who made a killing during the telecom revolution arethe “same people today [who] are looking at this opportunity,” saidSam Brothwell, a utility analyst with Merrill Lynch, at the annualmeeting of the Energy Bar Association in Washington D.C. last week.

“The idea of energy technology, fuel cells and distributedgeneration has captured [their interest], and I believe [it] willremain a compelling theme on the Street” for awhile, Brothwellnoted. In fact, at Merrill Lynch “we have created a separateresearch group and a separate banking group to deal with this goingforward. So we definitely believe in it.”

The residential market alone for fuel cells and distributedgeneration is “somewhere in the 90 some-odd-billion-dollars-a-yearrange. So it is a very big market,” he estimated. Initially, themarket for fuel cells will be “niche” in size, and will take offlater in the decade. “John Q. Public customer in most places in theU.S. is not going to realize [at the outset] the benefits of thisdespite the hype…..out there.

GE, which is at the forefront of the new technology for theenergy market, already has begun testing 50 fuel-cell units for theresidential market. If successful, it plans to commercially offer a7 kW unit for residential use beginning in the third quarter of2001, said Barry Glickman, president of GE Fuel Cell Systems. Itwill carry a price-tag of $8,000, and installation costs will varyfrom region to region. “Where natural gas is available, that [willbe] the fuel of choice” for fuel cells, he noted.

Who will be the rising utility stars in this new market? “Nobodyheard of Quest…..or [MCI’s] Worldcom as recently as five to 10years ago. We don’t know who the Quests and Worldcoms are going tobe in the power sector, but we do know that they’re out there,”Brothwell told the gathering of energy lawyers.

Some of the most “forward-looking” utilities include DTE Energy,NiSource, Keyspan and Public Service Electric and Gas in NewJersey. They are “embracing distributed power and see it as not athreat [to traditional markets], but [as] an opportunity,” he said.

Susan Parker

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