Officials of Appalachian Power Co. must be muttering in their executive suite in Roanoke: "We're damned if we do, we're damned if we don't."

For years -- all the way up to 1976 -- Appalachian, the major electric utility here in western Virginia, wanted to build a dam on the New River in Southwest to generate hydroelectric power. Appalachian said the new lake behind the dam would be a recreational wonderland, and, besides, there would be all that new, nonpolluting energy.

But nearby residents screamed that their land would be flooded and pooh-poohed the clean-energy argument, and Congress, responding to opposition that took on a national dimension, effectively quashed the plan by designating the New River a wild waterway.

Today Appalachian has another controversial dam project -- except this time it doesn't want to build a dam, it wants to destroy one. The impoundment, called Edmondson Dam, is on the Middle Fork Holston River about 10 miles southeast of Abingdon, the seat of Washington County.

Appalachian already has gutted the powerhouse adjacent to the dam, and now it has asked the Army Corps of Engineers for permission to demolish the dam. The dam has been classifed by the corps as "unsafe nonemergency," which means the dam is still substantially stable but needs repair. The corps cited numerous sinkholes in the limestone abutment on one side which were leaking and also said the concrete dam wall had begun to deteriorate.

Appalachian spokesman B. Don Johnson said the dam has "deteriorated to the point where it is not economically feasible" to make repairs.

Nearby residents, taking their cue from Appalachian's arguments for its aborted New River project, are saying Edmondson Dam, with its 70-acre impoundment, is a recreational wonderland, and, besides, could be reactivated as a source of clean hydroelectric power.

When the power plant was functioning, Edmondson generated about 500 kilowatts of power, or enough to serve about 250 homes.

Farmers who own land next to the lake deride the "unsafe nonemergency" classification.

"It would be next to impossible for the dam to collapse," says Jimmy G. Johnson, who owns a 200-acre beef cattle farm. "As for the leaking, it's been doing that for 40 years."

Another farmer R. G. Preston Jr., who operates an 800-acre beef and dairy farm, lives immediately downstream from Edmondson Dam. "I would be the first to get hit if the dam broke, but it's not going to break," he said. "Four years ago we had heavy flooding -- the most water I had seen in my life-time -- and the dam held."

The Washington County Board of Supervisors -- after listening to pleas by Preston, Johnson and others -- last week urged Appalachian to save the dam.

"It's been there 60 years," Johnson said. "It serves a beneficial purpose for recreation, duck hunting and as a wildlife sanctuary. It's doing no harm. I just can't understand Appalachian Power's thinking. It's selfish on their part."

But Appalachian says the dam must go. If the utility succeeds, farmer Johnson and other Edmondson Dam supporters will lose one recreational lake but, in time, might be able to enjoy another, even larger recreational resource about 18 miles to the west, in Brumley Gap. There Appalachian would like to build a dam that would dwarf Edmondson. And it would provide up to 3 million kilowatts of pumped-storage hydroelectric power.