Waste of Energy.

When Foster Wheeler Corp. secured financing for its $400 million trashto-energy plant in Robbins, Illinois, the engineering concern barely contained its joy. "This will be the most modern waste-to-energy installation in the world," it raved in a 1994 press release. Seven years later, the plant is in bankruptcy. Foster Wheeler lost $261 million on the misadventure. Investors who bought $321 million in bonds will be lucky to get back just 35 to 45 cents on the dollar.

Another eco-bust: the BCH waste plant in Bladen County, North Carolina. Built by a group that included three local governments, the plant was shut down after its equipment failed. Banks that lent $70 million retrieved just 4 cents on the dollar.

You can thank government for these uneconomical exercises. In the '70s, politicians in love with alternative energy fashioned laws to force garbage haulers in certain areas to participate and pay above-market trash disposal fees.

In 1994, the Supreme

Court ruled in Carbone v. Town of Clarkston that governments could no longer win customers at gunpoint. The result: 37 waste-to-energy plants have been shuttered since 1993, according to Government Advisory Associates, a Westport, Connecticut, consulting group. Taxpayer bailouts keep the restabout 100-afloat. For instance, when the McKay Bay waste plant in Tampa, Florida, couldn't pay off debt service or for upgrades, the city issued $193 million in bonds to save it.

And waste fuels live on. The federal government gives a tax credit of 1.5 cents per kilowatt-hour for electricity produced from poultry and wood wastes, and five senators have proposed extending the credit to other biomass fuels. California has granted $57 million since 1998 to 28 firms, and the feds spent $95 million on waste-to-energy research last year.

They haven't reached any breakthroughs yet. Turning smelly garbage into clean energy may sound terrific, but in practice, it turns out-ironically--to be wasteful.