Garbage. It was once believed that its only power was in its scent, but it is now valued by this midwestern city as a source of fuel for the local electric-generating plant. As tons of the pungent wastes pass on conveyors through the three-story, churning, clanking plant which converts it to fuel, Milwaukee boasts that it has the answer to the question of what to do about garbage.

But its answer -- the American Can Co.'s Americology resource recovery plant, which devours the city's discarded dreams to produce fuel -- has raised suggestions here that thrashed trash as an energy source is more garbage than good.

The plant, which was one of the first of a dozen American garbage-for-power and recycling systems, has had disaster and turmoil since it was erected beside the peaceful Menomonee River two years ago. Like many garbage-recycling operations, it has experienced nearly daily breakdowns, one major explosion and poor morale, according to company and city officials.

Besides processing garbage so it could be used as fuel, the system was supposed to recycle newspapers, aluminum, ferrous metals and glass. But the equipment was unable to separate the trash properly. Newspapers were covered with garbage and rags, and the other products were so contaminated that it was nearly impossible to find buyers. Only ferrous metal recycling is continuing while new machinery is being designed to handle other material.

In addition, the garbage fuel -- burned by the Wisconsin Electric Power Company along with powdered coal to run its generators -- has caused equipment problems and loss of energy capacity for the utility, according to Phillip G. Sikes, vice president of systems operations for the midwestern power company.

"All of us would like to forget about burning it at all," Sikes said. "But because we have some problems in this world we have to solve," the utility is going to keep using the garbage.

As if the daily problems weren't enough, the plant blew up last December. Despite meticulous inspection, a partially filled gasoline tank wasn't spotted until it was passing on the conveyors into the plant and already had saturated the garbage with fuel. Gasoline fumes ignited and blew the walls off the plant. Two workers were injured.The fire department doused the fire with water, which then froze, immobilizing all the equipment. Consequently, the plant was closed for three months.

"Everybody thought there was gold in garbage," said Gail Wray, a spokeswoman for the Americology plant. But "nobody's making any money."

"None of the people in the business recognized the complexities," said American Can executive Manny Creber. But "there are still opportunities involved" in using garbage for fuel, he added.

"We think there's great potential" in garbage, said Gerald Leighton, director of community systems for the Department of Energy. "It has a very high organic composition . . . that's all combustible. And as long as people are around, we'll always have garbage."

The Americology plant "used to be a real showcase," Wray said. But because of some of the plant's problems and unprofitability, the company "had a total change in management." American Can also just approved $4.5 million in modifications "to help the plant run smoothly," she added, and the plant that cost $18 million when it was finished two years ago now has cost the company $30 million.

"Some of the machinery in there will never be right," said Wray, a self-styled environmentalist. "It will have to be redesigned . . . They made some gross mistakes in this plant. When it first started, they put $2.4 million in there. Now two years later, they're putting in $4.5 million."

A spokesman at American Can Co.'s headquarters in Greenwich, Conn., said that the company is operating at a loss, but wouldn't disclose its size because "we're not required to. We are willing to say we are operating at a loss," the spokesman continued. "We don't know of any that aren't operating at a loss. This is a new industry."

The spokesman did say, however, that the company added $1 million in repairs and safety improvements after the explosion.

Garbage first was burned for fuel in the city about 1912. Milwaukee officials revived the idea in the middle 1960s as landfill space became scarcer, according to Milwaukee Public Works Commissioner Herbert A. Goetsch. In fact, using garbage for fuel was a secondary consideration. In 1970, the city stopped burning its trash at two incinerator plants because they couldn't accommodate the city's growing refuse and because stringent air pollution standards would have required the addition of costly equipment.

Americology charges the city $10.68 a ton plus a 50-cent surcharge to process the trash. The cost of using the closest landfill is only $9 a ton, but the city still must pay to have garbage hauled to the site, Goetsch said. He figures that the Americology fee would equal the cost of using a landfill in eight years, and then the city should gain.

City trucks pick up trash and deliver it to transfer points and the Americology plant. The trucks dump the refuse on the floor of the plant, sometimes on top of old garbage that already is smoking and fuming from bacterial action. The stench makes a garbage novice gag.

Other trucks then push the trash along the floor onto conveyors which take the trash through the plant, where it is inspected. Then the trash is moved into a giant shredder consisting of a series of rotating 150-pound hammers that pound the trash into small pieces. It travels through a maze of other conveyors and machines which blow light particles up and heavier ones down. The machinery also is supposed to remove aluminum and glass, but at Americology and many other plants this step doesn't work.

The pulverized lightweight material is loaded onto trucks and transported 22 miles to the electric power plant where it is used with powdered coal for fuel.

There are several problems with using the treated garbage as fuel, however, power company official Sikes said. When the garbage is burned, it tends to slag more than other fuel, that is, to liquify and then harden on the sides of the boilers. Sometimes this hardened material closes off oxygen in the boiler and snuffs out the boiler's flame, Sikes said. It also leaves large amounts of residue such as wood chips and bottle caps in the bottom of the furnace that "tend to plug the ash-handling system," he added.

The material also has a "deteriorating effect" on some of its other equipment, the Wepco vice president continued. And Sikes said he believes the treated garbage may be more polluting than Wepco's other fuels, but he is awaiting results of an Environmental Protection Agency study.

Thus the success of one of the main objectives of treating garbage -- to turn it into a good source for fuel -- "remains to be seen," Sikes said. "I have a feeling it's eventually going to be a viable fuel source. Whether this is the route, I don't know."

The garbage is burned in different proportions to coal, often about 3 to 4 tons of garbage to 30 tons of coal an hour, Sikes said. But when the garbage is burned, the utility loses 30 megawatts of power an hour, he said. The garbage generates about 5,000 British thermal units a pound compared with about 11,000 BTUs for coal, Sikes said. In other words, two tons of garbage generate the same amount of energy as one ton of coal.

"We're not saying it's not worth anything," Sikes said. "We just have some problems with it. The best thing I can say about it is it has BTUs in it, heat content. It's better than trying to burn earth."

The plant can store 1,600 tons of garbage a day, the same amount the city produces on a summer day, Wray said. So when the plant breaks down, the ground garbage goes directly to a landfill because there is no place to store it. Thf electric company often doesn't want it, anyway. For instance, at peak-use times, the utility stops burning the garbage fuel altogether because the generators need the capacity lost when the garbage is burned, Sikes said. That also affects morale.

"It bothers the foreman to think they're spending all this time and energy and it's just going to landfill," Wray said.

Then with the winter Lake Michigan winds whipping by, the garbage freezes on its way to the plant, causing more problems, Wray said. When it rains, it gets extremely soggy, "and that puts a load on the system." In the summer, it's infested with rodents and maggots in the trucks.

Production of a more compact landfill may be the best byproduct of the garbage treatment plant, according to city officials.

The Americology process has extended the life of Milwaukee's closest sanitary landfills by seven or eight years, Commissioner Goetsch said. Those landfills, about 20 miles outside the city, would have been closed already if not for the pulverized, compact garbage used for the last two years.

By the turn of the century, garbage could replace 1 million barrels of oil a day. It doesn't sound like much, but Leighton of the DOE said that amounts to $400 million a day, which "is not trivial."