Californians Face Threat of Life without Electric Juicers ; the State That Pioneered Utility Deregulation Is Now Struggling with Potential Blackouts and Soaring Bills

Article excerpt

It's the kind of thing most people take for granted: Flick a switch, you get light. Press a button, the computer starts up. Or the dishwasher begins churning, or the television blares.

But Californians are learning to think otherwise. Severely strained power supplies gave consumers around the state a nasty shock last week, bringing them to the brink of rolling power outages - which would have meant no electricity for hours at a time.

The state that became the nation's model for electric utility deregulation in 1996, promising cheap and plentiful supplies, narrowly avoided imposing rolling blackouts, which have never occurred here, and have happened only rarely in the rest of the country.

And though the soaring temperatures that contributed to the crisis are expected to ease somewhat in the week ahead, the political heat has been turned up for some time to come. Consumer groups, legislators, industry officials, and state and federal investigators have jumped into battle - proposing various solutions, while also raising questions about the effectiveness of deregulation.

In San Diego, the one part of the state where deregulation has taken full effect - resulting in a doubling of electricity bills in recent months - outraged consumers have been burning their bills and refusing to pay.

"This is an opportunity for us to wake up and smell the coffee," says Nettie Hogue, director of Utility Reform Network, a San Francisco-based consumer advocacy group. "This market thing is nuts, it's madness. It didn't make sense to deregulate what is an essential commodity."

Ms. Hogue is a proponent of re-regulating the industry in some ways, such as the cap put on wholesale electricity prices last week by the California Public Utilities Commission. She and other consumer advocates also argue that utilities need to install new meters in customers' homes to track what time electricity is consumed - thus passing along to consumers the savings gained by using electricity at off-peak hours. Most customers currently have meters from the days of fixed prices, when electricity usage was measured on a monthly average, and therefore do not benefit from deregulated pricing.

Californians are beginning to understand a few things about deregulation, a highly confusing and complex process that is still taking hold, with some price freezes in effect until at least March of 2002. …