CALIFORNIA STRUGGLES TO HEAD OFF BLACKOUTS

As if the botched deregulation of electric utilities in California hasn't caused enough damage already, customers can begin to look for bills that are up to 46 percent higher -- with additional increases scheduled for next year.

The California Public Utilities Commission unanimously approved the rate increases in an effort to curb the use of electricity. If successful, the reduced power load might prevent blackouts this summer when air conditioning makes power demand skyrocket.

Under California's deregulation plan, utility companies are prevented from passing higher wholesale costs to customers. And the electric companies are having to purchase a lot of high-cost power from other parts of the country because the California utilities have little incentive to invest in new generating plants.

This is the result of California's efforts to protect consumers from outrageously high bills for electricity, which apparently were feared when deregulation details were being spelled out. Instead, California customers are getting socked with big bills in an effort to keep utility companies in business.

Before anyone gets the idea that Californians can't afford electricity, keep in mind that the average electric bill is about $65 a month. This is the state where even modest houses go on the market for a quarter of a million dollars, and the cost of just about everything else is sky-high as well.

One San Francisco resident complained that the monthly electricity bills for her studio apartment has already gone to $70 from $26. And, she says, she doesn't even have a heater. Instead, she uses the kitchen oven to ward off the chill. In addition to higher bills, she is using probably the least efficient method of heating her apartment. The PUC might consider some consumer education.

So far, two of California's major utility companies, Pacific Gas and Electric Co. and Southern California Edison Co. have lost more than $13 billion since last summer, due mostly to the cost of buying wholesale power.

Meanwhile, other states have deregulated utility companies with much more success, leaving customers paying lower bills while supplies are ample.

As Missouri continues down the path toward deregulation, let's hope the planners are taking a close look at both the successful models elsewhere and the fiasco in California. There are important lessons that could save Missourians millions of dollars in the future.