The formula is top secret, and some say the technological claims are mathematically impossible.

But Raleigh politicians and state officials have been wowed by Optimal Technologies' claims that its product can prevent electricity blackouts and lower utility costs. They lured the startup company to downtown Raleigh with the promise of $650,000 if it creates 325 local jobs.

Optimal, based until recently in Canada, moved into its new Raleigh headquarters at the end of December.

The company plans to hire 125 engineers, programmers and marketing people this year to begin marketing its SmartGrid to power companies worldwide. The local jobs will pay $71,250 a year on average, not including benefits.

The eight-year-old company's product: a network management tool that can improve electricity flow over clogged utility transmission systems, many of which are aging and in need of expensive upgrades.

Improving the efficiency of power grids prevents blackouts and keeps a utility from having to build a power plant to meet growing customer demand for energy, said Optimal Technologies chief executive Roland Schoettle.

Eliminating the need for a power plant is a major draw in an era of rising energy costs and global warming concerns.

"If you're looking for results, we have no equal in the world anywhere," Schoettle said this week during an interview in the company's still-empty office in Raleigh. "The hard part is convincing customers."

The company's secret sauce -- and Achilles' heel -- is a proprietary algorithm that can perform complex calculations in seconds, rather than the hours or days it can take to perform the functions manually, Schoettle said.

But many electric companies have been reluctant to share proprietary data to run through Optimal Technologies' program, and Optimal is reluctant to show potential customers its confidential software code.

"There's always a certain amount of healthy skepticism when anyone makes fantastic claims," said David Hawkins, research and special projects leader for the California Independent System Operator, the organization that manages that state's power grid.

"That's their marketing challenge. If you have the superior mousetrap, how do you convince people it will catch the mouse -- without giving away the trade secret?"

Hawkins had to sign confidentiality agreements to work with Optimal Technologies' product.

Optimal Technologies got a major credibility boost in this state when it received $25 million in venture capital last year from financial powerhouse Goldman Sachs.

It was the Goldman Sachs seal of approval that pursuaded the state Commerce Department to recommend Optimal for incentives. That, in turn, led the Raleigh City Council to award its $325,000 portion of the incentive package.

Goldman Sachs vetted Optimal Technologies for six months, Schoettle said, commissioning a 20-page report from consulting firm of Frost & Sullivan. The report is confidential but was made available to Commerce Department officials. Goldman Sachs declined to comment on Optimal Technologies for this article.

Progress Energy helped recruit Optimal Technologies and is the company's landlord. Optimal has a two-year lease for office space on the top floor of Two Progress Plaza on Davie Street.

Progress Energy, an electric utility with customers in three states, would be an ideal client for Optimal Technologies, Schoettle said. But the two companies have no business relationship outside the office lease. Progress Energy officials declined to comment.

Optimal Technologies has committed to creating 325 jobs to qualify for the incentives, but that could grow to as many as 500 positions, officials have said. To meet the One North Carolina Fund grant requirements and receive the incentives, Optimal Technologies must create 325 jobs over the next three years and keep those jobs for at least one year.

The state typically pays incentives to established businesses that move to North Carolina, remain in the state or expand. In this case, Optimal Technologies is an obscure company with an experimental product that has been tested by about a half-dozen customers.

"It's not typical, but $25 million in backing from Goldman Sachs is very compelling," said Katharine Neal, assistant secretary for external affairs at the state Commerce Department.

The company has other supporters. Don DeBerry, the principal transmission planning engineer at the Sacramento Municipal Utility District, described the Optimal Technologies method as so advanced that it renders conventional utility analysis models obsolete.

"Right now it's sort of a black box: It gives you a number, but you don't know how you got there," DeBerry said. "The answer is pretty hard to validate a lot of times, because the Optimal product is running calculations that could take millions of iterations."

Optimal Technologies hopes to sign service contracts with large utilities and share in the multimillion-dollar savings generated by its analytical tools. Schoettle said the software is particularly good at managing electricity flow during times of peak demand, when utilities are paying the highest prices to generate or buy power. The product can also be used to control pollution emissions, maximize reliability and achieve other goals.

"This is not a one-trick-pony software," Schoettle said. "Imagine giving every car on the freeway tonight a tuneup. Imagine doing all those cars simultaneously, the complexity of doing that."