Advanced energy technology and old-fashioned agriculture are mingling on a Rensselaer County dairy farm.

For the past four months, Wagner Farms, a 300-cow operation in Eagle Mills, has been home to a propane-powered fuel-cell generator made by Latham-based Plug Power Inc.

In recognition of National Dairy Month, state Agriculture Commissioner Nathan Rudgers was on hand at the farm Monday to show off the device, which was funded with state money.

New York is the third largest dairy state in the country, with more than 7,000 farms producing more than 12 billion pounds of milk a year. The farms pay nearly $40 million in utility expenses annually, according to the state Department of Agriculture and Markets. The Plug Power machine is a GenSys 5P, a propane-powered version of the fuel-cell unit originally designed to power homes with natural gas.

Natural gas is harder to come by on farms than propane. The unit takes the propane, or gas, converts it to a hydrogen-rich material, and then uses the hydrogen in a chemical reaction to make electricity.

"As the price of fuel goes up, this will be an economic advantage to the farmer," said Roger Saillant, president and chief executive of Plug Power.

The company has four propane units at farms, including Stanton's Dairy Farm in Coeymans Hollow, Albany County; Verstandigs Wholesale Flowers in Selkirk; and Bowman's Orchard in Clifton Park.

The Wagner unit has been in place since February and has been used to heat the milking parlor.

The device produces about 5 kilowatts of electricity, or about 5 percent of what the farm needs.

"Eventually, we're going to have fuel cells that produce 100 percent of the fuel needed," said Rudgers, the ag commissioner.

The four-site fuel-cell project was funded with about half of a $700,000 grant from the state Department of Agriculture and Markets, said department spokeswoman Jessica Chittenden. Other money has gone toward solar water-pumping and anaerobic digester projects in other parts of the state.

"Primarily the goal for the project is to see how fuel cells will operate in that type of operation, supporting a farm," said Cynthia Mahoney-White, spokeswoman for Plug Power. Plug is marketing a different fuel-cell system as a source of backup power for remote cellphone towers

Peter Wagner, who runs the dairy farm as a partnership with his brother and parents, does not pay for the propane. Plug Power handles all the maintenance of the unit.

"I see them here once in a while," he said. "Sometimes, they're here a lot; sometimes, they're not here at all."