Chatsworth-based Capstone Turbine Corp. recently marked a milestone with the delivery of its 1,000th microturbine. What’s more, the energy supplier expects to deliver twice that many before this year is over. “We’re definitely looking to grow in 2001,” said Ake Almgren, Capstone president and chief executive officer. The 12-year-old company began offering commercial power-generating microturbines in 1998 to companies seeking to reduce both their electric power costs and the impact of a power outage on vital equipment. Although Capstone continues to operate in the red, Almgren predicts a turnaround by 2002 when orders for the energy-efficient power turbines bring in enough revenue to offset the more than $145 million in development and related costs the company has burned through since 1988. After going public last June, just months before California was plunged into an energy crisis, the company is riding a wave of investor optimism in its high-tech microturbines, which run on natural gas, but also can operate on diesel, hydrogen and other fuels. After raising $260 million from venture capitalists such as Microsoft Corp. co-founders Bill Gates and Paul Allen, and landing a $20 million federal grant, Capstone spent 10 years developing the newfangled generator that was finally available in 1998. In the meantime, the company suffered net losses of $30.6 million in 1997, $33.1 million in 1998, and $29.5 million in 1999, according to documents filed with the Securities and Exchange Commission. But Capstone’s recent performance hints at a trend toward profitability. Revenues jumped from $1.3 million in the first nine months of 1999 to $16 million through the same period ending Sept. 30, 2000. Still, while revenue figures increased, so did costs. The company remained in the red with a $25 million net loss during the first nine months of this year, substantially more than for the same period in 1999, when it lost $17.9 million. Proceeds from the June public offering amounted to $155 million. Almgren’s optimism is borne out by a flurry of orders for the gas-powered microturbines, which range in price from $30,000 to $60,000 per unit. In September, Chicago-based Harza Engineering Co. inaugurated a three-year distribution deal with a 250-unit order. Capstone also received a 126-unit order in October from Sherman Oaks-based American Energy Savings, Inc. American Energy President Jeffrey Valmus said the microturbines would help improve his company’s efficiency by providing less expensive power to its customers. Next came a major order from Canadian electric utility Mariah Energy, which agreed to purchase 126 microturbines. Hanover Co. ordered 100 units for distribution outside the United States and just last month Illinois-based Invensys Building Systems ordered another 100. “We’re very encouraged by the response we’re getting to our microturbines,” Almgren said. Bear Stearns analyst Robert Winters said the company is poised to become a major player in the energy market. Capstone’s lack of true competition and its high-end clean-burning microturbines will help push the company into the black, he said. Merrill Lynch analyst Sam Brothwell said the new technology holds promise in California, where he guesses legislative initiatives will encourage development. Brothwell predicted the company would continue to expand manufacturing capacity to meet demand. Although Capstone’s stock price took a beating along with many tech stocks this fall due to general low performance in that sector, Winters still considers the stock a “buy.” It peaked at $90 in September and subsequently slid along with other energy and tech stocks to a close of $23 last week. Company officials say they do not comment on stock performance. As a result of the recent electricity scare, Capstone has received inquiries about its microturbines from California companies leery about the possibility of power interruptions. “This is a clean-burning unit that uses natural gas and does not adversely impact the environment,” said Keith Field, Capstone communications director. In fact, the microturbines have only diesel-powered generators as true competitors. Some smaller firms have also begun development on their own microturbines, but none are in the market so far, Field said. The units work much as a jet engine or turbocharger, with blades mounted on a shaft supported by air bearings that rotate up to 96,000 revolutions per minute to generate electricity.