Each day, about an acre of Gordon Fletcher's birch and pine woods is ground into 100 tons of matchbook-size chips and trucked off to provide electric power for Burlington.

Fletcher's trees are feeding a utility which proclaims itself in the nation to sell electricity generated from wood chips, but Burlington's planners see them as only the beginning of as long line of "chip harvesters" like the red machine on Fletcher's farm that will turn whole trees into chips in a few noisy seconds.

This month, Burlington's traditionally tight-fisted voters gave 2 to 1 approval to a $40 million bond proposal for a large new generating plant that will keep chip harvesters grinding through Vermont's woods at a rate of about 470,000 tons of chips a year.

The coal strike protests and fears that have stymied development of several New England nuclear power plants, the hazards of relying on imported oil and the success of the wood chip experiment begun here last fall all contributed to the bond proposals overwhelming approval, Robert Young, general manager of the municipal electric company, said.

Heating oil cost 12 cents a gallon in 1972 and is 40 cents today. Canadian natural gas which was available for 40 cents per thousand cubic feet now costs six times as much.

It takes three times as much wood as coal to generate the same amount of heat, but at $12 a ton for delivered chips, wood is already the cheapest fuel available to Burlington Electric. Young expects wood chips to provide even a greater savings as costs of other fuels rise.

Young is also confident that there is enough wood in the Burlington region to feed the proposed new generation plant without damaging the forests.

For Young, whose Burlington Electric Department also won approval of bond proposals for a hydroelectric project and a facility to burn trash in order to produce hot water, energy-poor Vermont's predicament had become clear.

"We've got to do something for ourselves and the only resources we have are wood, water and trash," Young said. Even with the new projects, Burlington will be dependent on coal or nuclear energy or both for its base load of power but it will be more self-sufficient than it is now.

In 1972, Burlington Electric paid $11.92 a ton for coal delivered to its J. Edward Moran plant on the edge of Lake Champlain. Recently, it has paid more than $50 a ton, Young said.

According to a survey done for Burlington by the Washington firm Henningson, Durham & Richardson, there is enough annual wood growth within about 75 miles of Burlington to stoke the proposed 50-megawatt generator and its estimated annual consumption of 470,000 tons indefinitely.

Other power producers with larger needs have looked at wood chips and turned away in dismay. Gordon McKenny of the Public Service Co. of New Hampshire said studies indicated that to obtain from wood the 1,150 megawatts the company expects from its much-protested Seabrook nuclear plant it would need: 204 truckloads of wood per hour, or a truck unloading every 17.6 seconds and in 7.8 years would denude New Hampshire of trees.

By 1870, after generations of logging, Vermont was 42 percent forested. But as people left the land and farms were abandoned in this century, trees grew back until now more than 76 percent of the state is wooded - but it is not the same quality forest that the settlers found.

A 1973 forest survey discovered that nearly 30 per cent of Vermont's trees over five inches in diameter are commercially undesirable because they are rotting, diseased, mishapen or of a species not suited for lumber.

When the chip harvesters work in hardwood forest, whether private or state-owned, Young said, they will follow the directions of foresters and cut only those trees whose absence will aid the forest.

Gordon Fletcher, however, wants all his trees cleared to reclaim what once were fields. Before the chip harvester came to his farm, Fletcher was paying men to clear an acre or two of his land each year.

New, he gets paid 40 cents a ton for his previously unmarketable trees, but more important, he gets an acre cleared every day.

The trees are snipped off close to the ground by giant clippers mounted on a large-whelled vehicle. Another machine grabs a bundle of them and drags them from the woods to the clearing where the whole trees are taken in at one end of the chip harvester and chips are blown out the other as a snow blower blows out snow.

The chips fly into trailers each of which holds more than 20 tons. They are driven to the Moran plant where a huge pile of coal now shares yard space with two smaller piles of chips.

Burlington Electric converted one of the Moran Plant's three burners of take chips last fall. Plant Superintendent Thomas Carr designed and executed the conversion for $25,000. "That's less than we could've paid for a feasibility study that I could put on my shelf," Young said.

Three parts chips are burned with one part Number 2 heating oil to increase their heat generating capacity. However, a mixture of one-quarter oil is as saving for Burlington Electric, which has to mix 55 per cent oil with 45 per cent coal to meet state air quality standards when it burns coal. The chips cost about 2.3 cents a kilowatt hour against about 3 cents a kilowatt hour for the coal mixture, Young said.

"I don't think that small utilities should be gamblers," Young said. He stressed that the technology of wood chip burning is tested. A number of pulp and paper plants have used their waste wood to generate power. The Weyerhaueser plant at Longview, Wash., consumes almost exactly the 1,200-1,500 tons a day Burlington will need.

The total cost of the wood chip plant which Burlington hopes will open in 1982 will be almost $80 million.

Within a month, Young and other Burlington officials will visit Washington to knock on some doors. Young knows that Washington is interested in alternate energy projects and is funding many experiments.

"I'm hoping what we're doing will have a little appeal in Washington," he said.