There is enough garbage produced in Maryland each year to provide electrical power for 300,000 houses if it is transformed into energy, according to a report of Maryland Environmental Service, part of the state's Department of Natural Resources.

"We can generate electricity at a cost less than the cost the homeowner is paying now, through the burning of refuse," said Cliff Willey, chief of technical services for MES.

Baltimore County has one plant that shreds trash into burnable fuel on an experimental basis. And MES is planning a second one in the eastern part of the county that would process garbage for use as fuel to generate electricity to be sold to Baltimore Gas and Electric Co., Willey said.

County officials have approved the concept and are negotiating a contract for sale of the power to the utility company, he said.

The idea of turning trash into energy has received some bad publicity in Maryland because of the failure - so far, at least - of an elaborate $22 million plant in Baltimore City. It is supposed to convert trash into combustible gas by heating it at extremely high temperatures in an oxygen-free kiln.

But Willey said the plant has been closed for modifications of its complex "pyrolysis" process.

Pyrolysis is only one process for turning garbage into energy. The process in the new plant planned for eastern Baltimore County is simpler and has been successfully tested in several parts of the country, according to some experts.

"They're right on the verge of full-scale commercial application," said Frank Bernheisel of the National Center for Resource Recovery Inc. Bernheisel said similar plants are now functioning in Milwaukee; Ames, Iowa and elsewhere.

The new process works this way: garbage is hauled to the plant and shredded. Then ferrous metal is removed magnetically and the garbage is airblown to separate light, burnable material from aluminum and glass. The aluminum and glass in turn, may be separated and sold.

The light burnable material may be burned as "fluff" without further processing or compressed into pellets that can substitute for coal in modified boilers.

While the suburban Cockeysville plant is processing 650 tons of garbage daily, only a few hundred tons have been used in fuel experiments. The rest has been put into the nearby Texas, Md., landfill. Shredded trash is preferred for a landfill since it compresses well, taking less space than untreated garbage.

The refuse-derived fuel, (or RDF, as insiders call it), that can be produced at Cockeysville cannot be used by Baltimore Gas and Electric, Willey said. He said the compressed pellets must be used in a coal-burning plant. The utility has only one of these, and it depends on this plant so much that utility officials do not want to take any chances with an experimental fuel.

Pepco has at least one plant that could burn RDF, Willey said. But even though the pellets are so much lighter than coal transportation costs might make it too expensive to ship from Baltimore County to Washington.

Thus, the new garbage processing plant in eastern Baltimore County will have its own electric generating plant - eliminating transportation costs. Planning for the new plant is in a preliminary stage and officials do not know where it will be located or how much it will cost.

The MES study estimated that such a plant will supply electricity at 3 cents per kilowatt hour and will dispose of the trash at a cost of $5.92 per ton in 1980 - both figures more economical than current prices for electricity and trash disposal.