The Potomac Electric Power Co. faces an uphill struggle in winning approval for two new power plants at Dickerson, Md., because some state officials are concerned about the combined effect of emissions from the new coal gasification generating plants and a county trash incinerator slated for the same area.

Public hearings on the suitability of Pepco's Dickerson site -- a 1,000-acre area along the upper Potomac in Montgomery County where Pepco already operates three conventional coal-fired plants -- begin at 10 a.m. today before a Maryland Public Service hearing examiner in St. Mary's Church in Barnesville, Md.

The hearings open the first phase of a case that could take years. This first phase will examine only the general suitability of the site, where Pepco plans to build 750 megawatts of new generating capacity.

The plants, which Pepco said could be in partial operation by 1994, are needed to meet rising demand for electricity and will cost customers $2 billion based on internal Pepco budget documents that calculate the cost on a 5 percent estimated rate of inflation. The plants will cost $1.3 billion to construct based on 1987 dollars, according to Pepco.

The Maryland Power Plant Research Program, a division of the Maryland Department of Natural Resources that makes recommendations to the Maryland PSC on plant licensing, has given preliminary approval to the site for an expansion of Pepco's generating capacity.

But many unknowns about the health risks of a new coal gasification technology, coupled with a county solid waste incinerator that would be located nearby, make the licensing a thorny issue. Gasification converts coal to gas for burning in electrical generators.

"We have a lot of information and it's good -- it's just not complete," said James Teitt, the state's program manager overseeing plans for Pepco's Dickerson site. "It may mean we may have to say no to one whole plant. It could mean no to a certain voltage output or no to a gasifier" that would gasify coal to power generators.

Teitt said he expected that all the information would be provided over time by Pepco and makers of the gasification equipment, such as Texaco and other companies.

"We know what goes in and comes out, but we don't know what happens in the process stream, and until we are satisfied with the type and the amount of the compounds we won't be able to sign off on the licensing," he said. Municipal incinerator waste "isn't well understood," complicating the process still further, he said.

Pepco plans to use what is promised to be a new clean-burning generating technology that is said to produce lower emissions and smaller amounts of solid byproducts and to use less water than a conventional coal plant.

Pepco would install the two new plants at Dickerson in stages. Two combustion turbines that burn oil or natural gas would be installed first, then a heat-recovery unit would be added that would produce steam to run a steam generator. The procedure would be duplicated to add another 375 megawatts of capacity. If oil and gas prices shoot up, the utility plans to add the two gasifiers that use coal.

The technology has been successfully tested at the Cool Water Project, which produces electricity for Southern California Edison Co. in a joint effort between that utility, the Electric Power Research Institute, Texaco and other companies. The technology converts coal to a gas, cools the gas and rids it of sulfur -- a major contributor to acid rain -- as well as nitrous oxides, carbon monoxide and particulates. The gas is then burned to power electric generators.

The research program report says stack exhaust emissions at the end of the coal conversion process "are relatively easy to control." But combustion conditions during start-up, shut-down, or system failures "could be quite different," the report says.

The gasifier at the Cool Water Project "blew up" last year due to an 18-inch crack, causing the release of steam used to cool coal gas and some gas itself, said Norman Wilson, siting office manager at the California Energy Commission that oversees all permitting requirements in California for power plants. "The breach was not alarming, and we don't have a position on the severity of the problem" of the emissions, he said.

But the Maryland report says system failures carry "some potential for the production of complex and toxic hydrocarbons, and the biological effects of these compounds are not well understood."

Pepco spokeswoman Nancy Moses said Pepco is making every effort to get the necessary information. State officials say vendors generally guard information about emissions from new industrial or other processes because the emissions give away information about the process itself.

"We have a confidentiality agreement with a number of vendors -- Shell, Dow, Fluor, and Texaco -- so we ourselves can get information to help us in the ongoing development of the plant," said Moses.

Moses said the process has many advantages over conventional technologies because it produces lower air emissions and solid waste byproducts and uses less water than a similarly sized conventional coal plant.

In addition, the byproducts produced by the plant are readily marketable. A pure form of sulfur can be marketed to fertilizer and match companies, while ash and slag can be used by cement and other companies involved in road paving.

The Maryland power plant research program report says some solids could contain an array of metals and other compounds that are "hazardous" and could require special handling and storage.

The Electric Power Research Institute (EPRI) and California state officials are impressed overall with the emissions from the Cool Water Test Project.

"Our emissions are very low -- 10 percent to 20 percent of federal Environmental Protection Agency new source performance standards on nitrous oxides and sulfur dioxides that cause acid rain," said Paul Dinkel, a spokesman at EPRI. "Our particulates are also very low and our carbon monoxide is also very low."

The slag and coal ash that is a byproduct of the process has been classified as "nonhazardous," he said. Advances in the coal gasification technology have enabled companies to develop totally "enclosed" processes that prevent the release of toxic emissions into the air while the coal is being converted to a gas, he said.

But members of a local civic group, the Sugarloaf Mountain Citizens Association, aren't so sanguine about the effects of the coal gasification plant -- especially against the backdrop of a $170 million trash-to-energy incinerator they fought for years.

"We submitted over 100 questions on the power plant," said Richard O'Connor, a lawyer representing the group in the case. "Sugarloaf is still listening, but we haven't heard the whole story." State officials "have looked at siting, but not really the air pollution ... they really didn't have all the adequate data to address the concerns," he said.

Houston Miller, a chemistry professor at George Washington University and member of the Sugarloaf group, said the whole of Montgomery County is currently exceeding national limits for ozone, which can be harmful when it collects in the lower atmosphere.

Pepco's existing plants are already more than three quarters of the way to the federal ceiling on sulfur dioxide levels, and the incinerator may produce hydrocarbons, he said. "You may have increased the ingredients of everything you need to make ozone," and therefore smog, he said. The group is also concerned about the fact that the EPA does not currently regulate many byproducts of the incinerator combustion process, he said.

Maryland Air Management Administration officials who will give the incinerator an air quality permit are currently drafting regulations to control the emission of a wide range of toxins from incinerators.

Miller said the mix of water vapor from cooling towers and emissions from the incinerator could produce "some pretty exotic chemistry and some of it no one really knows about."

But John Menke, head of the Montgomery County Department of Environmental Protection, said he believes the problems from emissions will be negligible. The stacks of the power plants and the incinerator will also be at varying levels, which will prevent the mixing of the emissions.

Pepco says it selected the Dickerson site from four or five others because it is the least expensive place to locate a new plant and because it improves the ability of the utility to serve customers where demand is growing the fastest. There is plenty of room at the site and the plants can be built incrementally to match the rate of growth in electricity demand.

Two other issues likely to be addressed in coming months are waste disposal and water use at the site.

The site does not appear to have enough room to accommodate waste from the coal gasification process, said Maryland power plant research program official Teitt. Pepco says it is negotiating to purchase 400 acres of land adjacent to the Dickerson site. Sugarloaf Citizens Association member Bev Thoms has raised questions about a natural aquifer running under part of the land in the area and the transformation of some of the land, considered an animal sanctuary, into "an ash heap."

Teitt is also concerned that Pepco will have to invest more and build a larger pond than it plans to meet the plant's water requirements without depleting the Potomac River's water level.

Above all, Thomas said some residents in the area fear that the siting will take place before the need for the power plants and the effect of those plants and the incinerator are fully assessed. "We are the victims of two experiments," she said. "Nobody wants to look at the synergy of the two.