The company, Waste Energy Integrated Systems, has not made an offer on the plant or its 789 acres, and the plan rests on its ability to raise $70 million to buy and retrofit the plant.

The company's proposal that Yolo County farmers contribute up to $20 million and become partial owners of the plant has gotten a tepid reception. So have attempts by a Minnesota cooperative and local residents to encourage growers in the county to form an ethanol-producing cooperative.

There's little doubt that an ethanol plant at the Spreckels site would have a solid market for its product. The ethanol industry -- which largely consists of corn producers in the Midwest -- was gleeful with the potential of breaking into the California market after a ruling Tuesday by the U.S. Environmental Protection Agency.

The EPA denied a request by Gov. Gray Davis to waive a federal requirement that gasoline sold in about 75 percent of California must contain oxygenates. Oxygenates, like ethanol and MTBE, are added to fuel so that it will burn more cleanly, although some dispute their effectiveness.

Davis requested the waiver after MTBE, the most widely used gasoline oxygenate, poisoned groundwater supplies in some parts of the state. Davis has ordered a phase-out of MTBE by December 2002, and ethanol is the most viable alternative.

Refiners in the state are expected to use more than 700 million gallons of ethanol annually beginning in 2003, according to a state Energy Commission study.

California has only two ethanol producers, said Pat Perez, manager of the state Energy Commission's transportation field supply and demand office. A plant in Rancho Cucamonga makes ethanol from beverage waste, and a Corona plant produces the chemical from cheesemaking waste. Combined, these two plants produce only about 4 million gallons of ethanol annually.

Initially gasoline producers will have to import ethanol from the Midwest. The added cost is expected to be passed on to California consumers, who can expect to pay at least an extra 6 cents per gallon, the Energy Commission estimates. But costs could fall substantially as the state develops its own ethanol industry.

"I expect to see the big parties from the Midwest coming in a big way," Perez said.

Can't beet it: The Spreckels site could be an appealing location for these companies because it's located in the heart of ag land.

Charles Lombard, president and chief executive officer of Waste Energy Integrated Systems, said his company likes the site because it has railroad access, a boiler and turbine for generating power, and equipment that can be retrofitted. His company hopes to buy the plant and 789 acres of land owned by the bankrupt Imperial Sugar Co., which owns Spreckels Sugar.

Imperial Sugar closed its Woodland and Tracy plants early this year, putting an end to the sugar beet industry in Northern California.

Yolo County landowner Gordon Gaddy said retrofitting the plant for sugar beet production could substantially benefit Yolo County growers by providing a market for their crops.

For almost a year he's been seeking investors who might be willing to convert the plant into a factory that would make ethanol, preferably from sugar beets, to reinvigorate Northern California's sugar beet industry. Only Lombard's company has responded, and its proposal doesn't involve sugar beets.

First corn, then other stuff: Lombard proposes retrofitting the plant in two stages. During the first phase, the Palo Alto company would outfit the plant to produce about 40 million gallons of ethanol annually from about 400,000 short tons of corn. Later equipment would be added to make 20 million gallons annually from 250,000 tons of corn stover, orchard prunings, rice straw and other plant wastes.

Sharon Shoemaker, executive director of the California Institute of Food and Agricultural Research at the University of California at Davis, is skeptical.

Lombard "has no experience in doing this," she said. "It's at an early stage of consideration. ... It would be a great boost for the community, but I don't know what (could) be used from the old plant."

Lombard presented his company's plan to Yolo County growers about two weeks ago at a meeting sponsored by the Yolo County Farm Bureau.

Representatives of an ethanol-producing cooperative in Minnesota also spoke, encouraging farmers to form a cooperative based on their model. There hasn't been a lot of interest in either idea, according to Casey Stone, the county Farm Bureau's president. "I really haven't had a lot of feedback yet," he said.

Landowner Gaddy said he favors forming a cooperative in which growers hold the controlling interest.

Phil Cherry, a Placer County resident who invited the Minnesota representatives to speak to California growers, said he thinks interest will grow now that the U.S. EPA's decision has virtually guaranteed a strong ethanol market. Cherry has a background in petroleum refining and hopes someday to oversee operations of an ethanol production plant on the Spreckels site.

Looking for a product: Waste Energy Integrated Systems has about a dozen people on its technical and management team, Lombard said. The company aims to commercialize new energy and materials technologies, but it has never produced a product or generated revenue.

The company has a license from the University of Minnesota to develop a biodegradeable material from plants that's similar to plastic, Lombard said.

He started the company in 1997 after government funding dried up for a company he previously managed. That company, Peda Corp., developed mathematical algorithms and computational fluid dynamics technologies for the aerospace industry.

Waste Energy hasn't raised any money for the proposed ethanol plant. Lombard said the company plans to use ethanol plant designs engineered by a Williamsburg, Va., company called Delta-T Corp. which has been used in a Benson, Minn., ethanol plant.

State ponders incentives: "I've had a number of people approach me about looking for state support for that facility, but I have yet to see a business plan," said Perez of the state Energy Commission. "You really need a business plan before you can go to a bank and secure any kind of funding."

The state doesn't offer any funding for ethanol projects, but the federal government offers tax credits of 53 cents per gallon of ethanol produced, which has essentially supported the industry in the Midwest.

California is examining mechanisms for supporting the industry, Perez said. In March the Energy Commission released a report that estimated the state could generate $1 billion from new jobs and increased tax revenue over 20 years if the state offered $500 million of incentives for a 200 million gallon-a-year ethanol industry.

For years, entrepreneurs have proposed building ethanol plants in the state.

BC International Corp. of Dedham, Mass., is working on designs for factories in Gridley and Chester that would make ethanol out of agricultural and forestry plant wastes. The idea has been enthusiastically supported by Sacramento Valley farmers who are urgently seeking a market for the 1.5 million tons of rice straw they produce each year.

Burning restrictions have made it more difficult for them to cope with rice-straw waste. But technology for converting biomass to ethanol has not yet been commercially demonstrated, and BC International's plants aren't likely to come online before 2004 or 2005, Perez said.

In the mid-1990s, Arkenol Inc. of Mission Viejo planned to build an ethanol plant in Rio Linda, but the company couldn't raise the $100 million needed for the project and sold its building rights to FPL Energy Inc., which plans to build a power plant fired by natural gas on the site.

Perez said he's periodically approached by others interested in building ethanol plants in the state, usually because they're seeking state subsidies to help them out.