BILLINGS -- Eight fuel cells tucked into a corner of the Montana State University-Billings campus have quietly been churning out electricity since November with little fanfare.

On Aug. 14, the fuel cells generated some excitement along with electricity as local dignitaries paraded by to see how the clean, efficient energy producers worked.

The fuel cells are part of the Montana Palladium Research Initiative, which is testing four platinum and four palladium fuel cells made by Plug Power of Latham, N.Y.

The $1.6 million project is important to each of its collaborative partners, including MSU-Billings, the Department of Energy, Montana-Dakota Utilities, Plug Power and the Stillwater Mining Co.

Fuel cells convert natural gas or propane into electricity with little or no carbon emissions, unlike many other methods of power generation, said Rich Chartrand, director of mechanical and chemical engineering at Plug Power.

In the MSU-Billings project, hydrogen is first extracted from propane.

Then, the hydrogen passes to the fuel cell stack in a process that makes electricity. The last step converts energy from direct current (DC) to alternating current (AC).

Each cell can produce 5 kilowatts of electricity each hour. The eight fuel cells have been turning out enough electricity to light and power two to three classrooms.

Billings, one of several sites around the country testing these types of fuel cells, has been a good place to see how the cells perform in cold weather, Chartrand said.

The company is working on turning fuel cells like MSU-Billings' into components that could be used commercially.

A goal of the Billings project is to compare how well platinum and palladium fuel cells work.

Platinum traditionally has been used in fuel cells. Now palladium is being tested to replace more costly platinum membranes in fuel cells.

Palladium costs $310 an ounce and platinum $1,500, said Stillwater Mining Co. chairman and CEO Francis McAllister. Palladium also is more plentiful in North America than platinum.

The Stillwater Mine south of Absarokee has three times the amount of palladium than platinum, McAllister said.

This is the first time that Plug Power has tested both types of cells side by side outside of the laboratory, Chartrand said.

Under the direction of Stuart Snyder, MSU-Billings assistant professor of physics, water that is produced as a by-product of making electricity by the fuel cells is being examined with a laser to see if the liquid contains minute particles of platinum or palladium and how much, which could indicate if a fuel cell is degrading and how rapidly.

Money from the fuel cell project enabled MSU-Billings to buy the $130,000 laser -- the best of its kind -- which will beef up research possibilities at the university and help train students to make them more competitive when they apply for graduate programs, said Tasneem Khaleel, dean of the College of Arts and Sciences.

The laser can be used in other research, such as analyzing coalbed methane effluent and water coming out of municipal water plants or industrial sites, said Jim Barron, MSU-Billings biology professor.

The MSU-Billings fuel cell project is important for another reason. It is the largest single site of its kind that uses wireless Internet to send data from each fuel cell back to its manufacturer.

Engineers in New York can troubleshoot any problems that come up in Billings around the clock over the Internet.

Brian Gurney of the MSU-Billings College of Business led the Billings project and continues to manage it.

The project grew out of a successful 2004 program to test fuel cells at the Billings Armed Forces Reserve Center.

Partners in that project, including Plug Power and MDU, worked so well together that they were eager to work on another one, Gurney said.

So far the MSU-Billings fuel cells have performed well.

They produe electricity 93 percent of the time, which is more than the 90 percent that the Department of Energy requires for projects it funds, Gurney said.

Federal funding for the MSU-Billings fuel cell project is scheduled to end in November, but project partners hope more money can be found to continue it.

U.S. Sen. John Tester, D-Mont., spoke at the Aug. 14 event, saying that the country needs to make energy research a priority for national security and to strengthen the economy.

The fuel cell program was followed by a roundtable discussion of energy issues conducted by Tester and attended by representatives of Montana's congressional delegation, state government, county commissioners, city officials and civic and business leaders.