A Latham, N.Y., company wants to put a power plant in your backyard. Plug Power is testing a residential fuel cell system in a proof-of-concept home. The house taps into the natural gas distribution network, processing the gas into a hydrogen-rich stream that combines with oxygen in the air to drive the fuel cell's chemical reaction. The system generates electricity for 7 to 10 cents per kilowatt-hour (on par with utility prices) and emits only carbon dioxide, water and heat (which can be recycled to warm the home's air and water). The refrigerator-size unit converts 40 percent of the gas's energy into electricity, providing all the power for the 3-bedroom test home. Merrill Lynch analyst Sam Brothwell has been watching Plug Power and sees "tremendous potential." He predicts early adopters will get their hands on these systems in 2001 or 2002.