High in the Trinity ALps of northern California sits a single Pelton turbine whirring away inside The garish yellow sign out front identifies it as Mom & Pop Power Co. of Weaverville (population, 3,500).

Mom & Pop Power Co., which this year will sell some $60,000 of its kilowatt wares to Pacific Gas & Electric Co., is the product of George and Barbara Mallett and their six children, who range in age from 12 to 27. But it really owes its existence to the Public Utilities Regulatory Policies Act (PURPA), a component of the National Energy Act of 1978.

"Our ranch has had hydro on it since the turn of the century," explains Barbara, "and for many years there has been legislation stipulating that excess power had to be purchased by a public utility. But it didn't set a price." In the past, PG&E offered half a cent per kilowatt hour -- "not enough to pay the powerhouse." After PURPA, it had to pay "avoided cost," or whatever it would cost to generate the same amount of electricity by burning oil. That shoved the price to 8 cents per KWH, and made small hydro a viable business.

In 1978, only 18 applications were filed to build small hydro projects in the United States. By 1982, the number had shot up to 1,800.

The Malletts, who have been raising apples, sheep, and hay on their ranch since 1971, were excited by the prospect of "small business . . . competing with the megacorporation," and invested $18,000 of their own money, $162,000 in outside funds, and one year of the family's time to bring Mom & Pop on line in 1981. The technology they found easy, but the bureaucracy proved a burden: PG&E was less than overjoyed by PURPA, and nearly 20 public agencies were involved in the approval process.

Since the switch was thrown, however, M&P has proven to be "a fine business," earning from 30% to 50% on sales, and the Malletts seem less threatened by future acts of Congress than by acts of God. Last winter, floods washed away ditches that channel water to the powerhouse, putting them out of commission for three months.

Newcomers to the field may find the going difficult, however. The bureaucracy, Barbara Mallett explains, has put more and more roadblocks in the way: A water claim, which once cost $10 in California, may now run as high as $130,000, with the developer forced to pay for extensive and sometimes repetitive environmental-impact studies. "The small entrepreneur, unless he has got a lot of money behind him, has essentially been stopped," Barbara says.