Electric utilities attempt to meet fluctuating demands for power at lowest cost and with least consumption of premium fuel. Base-load coal and nuclear plants are designed to supply about 50% of maximum load. The remaining load is supplied by less efficient cycling generators which burn natural gas, petroleum, or coal. The compressed air energy storage (CAES) method reversibly converts electrical energy to mechanical energy. Air compressed with excess base-load capacity during off-peak periods is stored within an excavated geologic cavern or water-bearing porous rock formation. During peak-load periods, compressed air is released, mixed with fuel, burned, and expanded through turbines to generate power. CAES reduces conventional peaking plan consumption of petroleum by over 60%. Advanced conceptual plants could eliminate petroleum consumption by either (1) storing the heat of compression to reheat the compressed air, or (2) passing the compressed air through a pressurized fluidized coal-bed combustion chamber. CAES provides flexibility, frequency control, rapid start-up, and smaller impact on the en ironment than cycling plants. In California, potentially favorable geologic sites for CAES exist in depleted gas fields, depleted oil fields, saline aquifers, and hard rock formations. Economic benefit was evaluated using sensitivity analysis to identify how various parameters affect the bus-bar cost of electricity. Feasibility also depends upon the power generation cycle, experimental proof of operations in aquifer reservoirs, and institutional and legal clearances. The future potential for CAES is discussed with respect to the geology and population distributions of the Circum-Pacific region. End_of_Article - Last_Page 957------------