The

Clinton

administration's decision to tap the nation's emergency oil reserve has helped pull oil prices back from a 10-year high of $38 to the low-$30s range. However, it might be too late to curb the push by financial planners and mutual fund managers to seek greener pastures.

High energy costs are likely to be a problem through the winter, according to economists. But the implications for the market extend beyond this winter. Companies have redoubled their efforts to develop alternative sources of energy -- from solar power to cleaner forms of power generation -- and these companies are attracting heightened interest on Wall Street, says Stephen Barnes, a portfolio manager at

Barnes Investment Advisory

in Phoenix.

This doesn't mean investors should dump their shares of old-fashioned oil companies and flee to the arms of speculative company working on, say, harnessing wind power. Alternative energy is developing slowly, which may mean a long gestation period for companies aiming to turn a profit from these new technologies.

But for fund managers -- and long-term individual investors -- new companies and established energy concerns that can develop successful alternatives to oil-derived energy sources stand to be huge winners.

Weather-driven power sources, like solar and wind power, are unreliable, but the forecast for fuel cell technology is very good, says Barnes. Unlike traditional methods -- burning coal, gas or oil to generate power -- fuel cells use hydrogen as fuel, and so only have heat and water as byproducts. But fuel cells still operate on too small a scale to make an impact on the energy business, he adds.

The problem for investors is that many alternative technology companies are trading at a premium, so finding value is complicated, says Barnes. An example is

Ballard Power

(BLDP) - Get Report

, a Canadian fuel cell maker.

Daimler-Benz

purchased a 25% stake in the company for about $200 million in 1997 and aims to develop fuel cells for the automobile market.

Ford

(F) - Get Report

purchased a smaller stake in 1998. Since then, Ballard's stock price, which traded up from just over $30 in January to its current price of around $115, has risen too high to be considered an alternative energy bargain.

"The biggest push for fuel cell energy is in the automobile market, and Ballard Power is the furthest down the road," says Barnes. "But our strategy is to find reasonably priced participants in the alternative fuel space, so we're looking at companies with subsidiaries in an advanced stage of development or at buying into companies that make this technology." In time they are likely to unlock the value of these technology companies and spin them off, he adds.

Other energy-related companies with high valuations include

Calpine

(CPN)

,

Enron

( ENE) and

Duke Energy

(DUK) - Get Report

says Justin Craib-Cox, a stock analyst at

TST Recommends

Morningstar

. But there are some companies where value can be found, such as

Avista

(AVA) - Get Report

in Spokane, Wash., which operates a fuel cell unit and a local power utility. "They have missed their earnings targets and so they are discounted a lot," he says. "In the long term they look pretty good."

Given an increased demand for energy, a number of utilities and independent power companies are looking for ways to develop cutting-edge technologies, says Craib-Cox. Many are aiming to make the transfer and sale of power between utilities more efficient, he says. These companies include

El Paso Energy

( EPG),

Southern Co.

(SO) - Get Report

and

TXU Corporation

( TXU). Each company is profiting from the rising price of energy and renewed interest in the utility sector.

A company worth watching is Arlington, Va.-based

AES

(AES) - Get Report

, which aims to help large industrial companies to make their power plants more energy efficient. "This company is growing very quickly and providing a lot of gain year on year," says Craib-Cox.

Another beneficiary of the upsurge in this sector is

New Alternatives

(NALFX) - Get Report

, which is ranked second for total returns for the quarter ended Sept. 21, according to Lipper. The fund, which has over the last year has grown from $35 million to nearly $60 million in assets, has posted a year-to-date return of 67.5%. Around half of the fund's investments are in alternative energy companies, including fuel-cell energy companies such as

FuelCell Energy

(FCEL) - Get Report

, and

Plug Power

(PLUG) - Get Report

.

While it plays a role, the current price of oil is not the primary reason for the fund's performance, says Maurice Schoenwald who manages the fund with his son David. "We have pursued alternative energy since 1982 when the fund started, but recently the technology has become cost effective and some of these companies are competing with conventional energy providers."

However, investments in alternative technology are speculative, warns Barnes. "What's speculative is not the viability of the technology but the company's worth. I think a really big issue is getting the company's valuation right, which is hard when dealing with a company that is more concepts that fundamentals."