Hydrocarbon fuel energy is converted to AC electrical energy by a new system utilized to supplement AC power for household and similar limited size loads in synchronism with existing AC utility service via pre-existing wiring between the load and the utility lines. The system has an externally excited commutator AC motor-generator driven by an internal combustion engine to provide AC power at a magnitude which is a function of the drive shaft velocity and degree of excitation. An exciter circuit provides excitation for the motor-generator to cause the generated AC power to be in phase with utility power. A load demand sensor senses current flowing through the wiring to the load, providing a control signal signifying magnitude of the current, thus measuring load power requirements. Control circuitry interconnected with the exciter circuitry and the engine is responsive to the control signal to control excitation for causing the generated supplemental power substantially to meet load requirements. The control circuitry also controls engine speed to provide sufficient engine power to meet these load requirements. Mechanical elements of the system are contained by an insulated, sound-proofed enclosure. Air is drawn into the enclosure for cooling of the motor-generator and for recovering heat from the engine and the engine exhaust. The heated air is ducted out of the housing for use in household heating, etc. Various circuit features, including a phase sensitive detector, ensure that electrical power generated by the system does not flow back to the utility service. The system starts and stops automatically according to power demand.