While interest in energy conservation is at a low ebb and state legislators are plagued with budget shortages, the Utah Energy Office is awash in dollars.

Established by federal mandate during the oil crisis in 1977, the office's state appropriation has dwindled in the face of lawmakers' concern for other priorities like education.But this relatively obscure agency now enjoys a multimillion-dollar windfall from its portion of fines collected by the federal government from major oil companies that violated price-freezing agreements.

"We have more money than we've had to spend for a long time," spokeswoman Linda Neilson said. "It's kind of an irony because we have a phasing down of the public's attitude of the importance of energy conservation. When the price of gas goes down, the public's concern over conservation falls dramatically."

But the office's director, Richard Anderson, sees some good in that, because work unencumbered by a "crisis mentality" is more productive and creative. Moreover, he said the financial reserve will serve the state well in a potentially volatile world fuel economy.

"We will see a time when supplies once again will tighten up and prices will rise," Anderson said. His staff's job, he said, is to keep the energy issue from slipping into anonymity during a myopic era.

In awarding the overcharge money, the DOE stipulated it must benefit a public that suffered from overpricing, "recognizing that if they bought a five-gallon tank of gas, it's a little difficult to get them their 53 cents," said Rep. Jack Redd, R-Bountiful, chairman of the Energy Conservation and Development Council, the office's advisory arm.

Of the funds every state received from a settlement of the federal government's lawsuit against Exxon, Utah received $12.4 million in early 1987 - eight times the amount granted by Congress through the U.S. Department of Energy and 35 times the 1988 state appropriation. Other overcharge settlements are pending, Neilson said.

The money has been placed in an interest-bearing account. "We're talking about $12.4 million," Neilson said. "That's earning a lot of interest."

But it won't sit idle, even in an era of energy complacency. Much of it is tied up in five-year conservation plans, including weatherization programs for schools, hospitals and other private and public buildings that save 18 percent to 20 percent on annual fuel bills, Redd said.

Despite the windfall, Anderson said his office still must battle for life against a Legislature with other priorities.

"Since our benefits are widely dispersed to the public, it's hard to get support," he said. "It usually manifests itself in an annual attempt to severely limit, if not eliminate, the office in the budget process."

In the 1988-89 budget year, the state gave the energy office $359,200, compared to $536,000 two years ago. Its federal DOE appropriation this year was $1.5 million, compared to $2.3 million the year before.

"Every year, you have to come in with a significant list of accomplishments, otherwise there is legislative pressure to put you out of business," Anderson said. "The fact that we've been able to survive that is a good signal."

While much of the falling state support is tied to the office's new wealth, Anderson and Redd see the cuts as a threat to the long-term goal of the office - developing alternative energy programs.

"I think its really shortsighted," Redd said. "I don't know how we can persuade people to develop some of these outside energy sources."

He said the council continues to promote projects to harness wind, solar and geothermal energy, as well as non-renewable sources like tar sands and oil shale.

But the 13-member group, comprised of legislators, citizens, environmentalists and other experts, historically has met with a skepticism for expensive new technology often proposed for areas with oil and coal-based economies.

"I'm persuaded that the federal government made a mistake when it got out of the oil shale and tar sands business," Redd said.

Such ventures are capital- and research-intensive for the government or private industries, which still reap greater profits from the drilling of oil and gas wells, he said.

The discovery of the Overthrust Belt, an oil-rich geologic fault running from Alaska to Mexico through the Rocky Mountains, further complicates efforts at long-term conservation planning in Utah.

"The feeling is, we've got it today, let tomorrow take care of itself," Redd said.

One idea born in the council this year is an unprecedented program to solicit public bids for alternative energy projects. It will be funded by $2 million from the overcharge fund.

Requests for proposals have been sent to interested citizens and worthy candidates are invited to preview their ideas at a conference here June 7, Neilson said.

Anderson and Redd are confident of one thing. The public eventually will be forced - as it was during the 1970s - into concern about the source of its energy. Dwindling oil supplies make that a certainty.

Meantime, Redd said, "one has to get research and development and good ideas now, so when things turn around, we can get on them right away."