California's newest industry -- a $7 million plan to make power from manure -- finally was rolling.

By the end of the year, 12 of 14 state-funded pilot projects on dairy power are expected to be operating, and three more dairy generators are planned next year for southern Sacramento County.

The stakes are high, as the state tries to reduce dairy odor, meet renewable energy targets and curtail emissions of greenhouse gases linked to global warming.

But so-called biogas plants, already more than two years behind schedule in California, are not sure bets. The Central Valley's potential for manure-based energy could fizzle without more evidence about environmental benefits, cooperation from power companies and new incentives to turn pollution into power.

Since its creation during the 2001 energy crisis, the Dairy Power Production Program, under the auspices of the California Energy Commission, has been hampered by technical problems at dairies, along with low milk prices and state budget cuts.

Much of the problem has been pinned on power companies, where obstacles became so severe they were addressed by a state Senate committee in August.

"(Power companies) just don't want to help," said Mark Moser, president of Berkeley-based RCM Digesters Inc., which designed Castelanelli's methane digester. "The more high-priced energy they sell, the better it is for them."

In one of many tussles, dairy power backers fought a package of tariffs proposed by the state's big three power

companies that some environmentalists and farm interests believed would undermine biogas.

And there are more practical problems. Sustainable Conservation, a San Francisco environmental group that supports dairy power, said utilities are taking an average of one year to approve permits connecting biogas facilities to the power grid.

"The common theme ... (is) bureaucratic delays, excessive electrical equipment requirements -- often beyond what other states require -- costly studies and uncertainty of outcome," said one recent report by the conservation group.

Many complaints are directed at Pacific Gas and Electric Co., which services 70,000 square miles between Bakersfield and Eureka. Company officials say they support dairy power through "self-generation" grants, and they are trying to reduce the confusion that has slowed progress.

"It's been a little difficult at times," said Mike Steele, the PG&E coordinator of the Castelanelli project. "We do our utmost ... to make these projects successful."

Dairy power expert George Simons at the California Energy Commission, the state's main energy policy agency, said startup problems are beginning to dissolve as the first dairy digesters get online.

For power companies, small independent producers can create complications and even safety problems in rural areas, said PG&E official Kim Whitsel.

"A lot of times, folks look at this as plugging in the toaster," she said, "but it's very far from that."

PG&E plans to meet in December with dairy interests and reduce their uncertainties.

California is home to 1.7 million dairy cows. Many are penned in corrals between Sacramento and Bakersfield. The state's 1,950 dairies generate an estimated 16 million tons of manure -- in addition to liquid waste -- each year.

Engineers have tried to turn manure into power for decades, but the idea is now starting to gain widespread attention in California because of demands to reduce pollution and reduce peak power use.

Under current goals, the state aims to gather 20 percent of its energy from renewable resources by 2010.

California's 14 pilot projects cost an average of $1.2 million each. About half the money comes from state grants, and federal money also cuts costs. Participating dairies are expected to generate 3.5 megawatts, enough for about 3,500 homes.

About a dozen methane-powered plants operate nationally, but Simons at the Energy Commission said 40 percent of California dairies could have biogas running within a decade.

Mike Lee is a reporter for the Sacramento Bee.