Proposals Add Confusion for State’s Users of Electricity : Utilities: Several different plans would allow businesses and the public to choose where they buy their power.

What electricity customers might at first view as simple--letting them choose where they buy their power--is proving to be anything but.

State regulators decided last April to open California’s electric power market to competition, which many hope would lower Californians’ power rates--now roughly 50% higher than the U.S. average. Today in San Diego, in the latest in a series of public hearings, they will continue to grapple with how to reorganize the massive industry to allow businesses and consumers to make that choice.

With the recent filing of a new and somewhat surprising plan by Southern California Edison, there are now several fundamentally different proposals on the table.

All the proposals would in principle permit customers to choose power vendors much as they now choose long-distance telephone companies, but they lay out vastly different roles for current and future players in the power business.

Edison’s new plan would bring retail competition to all businesses and residents as early as 1998, far earlier for many customers than under the Public Utilities Commission’s own plan. “Every proposal has some pluses and minuses,” conceded Vikram S. Budhraja, Edison vice president for planning and technology. But only under the Edison plan, Budhraja contends, can “all customers be assured that they are going to continue to get reliable service and get the benefits of competition.”

Improved technology and changes in federal law in recent years have allowed private companies other than regulated monopoly utilities to produce electricity. Large industrial power customers, especially, have demanded that this electricity be directly available in a competitive market.

Seeing competition as inevitable, the commission proposed deregulating much of the electric-power business from 1996 through 2002. Eventually, all customers would be able to choose a supplier. In some cases the local utility might be reduced to an intermediary which in effect rents customers the wiring required to deliver the power.

At the heart of Edison’s new proposal is a regional power pool through which all electric power--whether produced by a utility generating plant or a small private power producer in a neighboring state--would compete for customers. Based on a continuous auction, the pool would set a spot price for power as often as every 30 minutes. Utilities, brokers or individual customers would buy power from the pool. San Diego Gas & Electric also wants such a pool.

In a new wrinkle, however, Edison would also allow direct deals--so-called bilateral contracts--between power generators and customers outside the pool. But Edison doesn’t believe that most customers--particularly small-business and residential users--would want to play the power market so directly.

“That would not be efficient,” Budhraja said. “Four million customers couldn’t go to a bilateral contract world. . . . To make a regional power market work, you have to have a system that includes the most players.”

Planners at Pacific Gas & Electric, however, see such a power pool as unnecessary.

“Customers say we don’t want to be contracting with an intermediary,” said Robert D. Glynn Jr., PG&E; executive vice president.

PG&E; proposes placing only what it calls a supply coordinator between the customer and the power generator, to be sure that the correct voltages and system balances are maintained. A market would develop much as it has under natural gas deregulation--through individual, bilateral deals between power generators and individual industrial users, or between generators and brokers representing groups of small businesses and residents.

Meanwhile, in an effort they term the Hunt for Green October, environmentalists have sketched out their own plan to cut electricity costs in a competitive market while preserving California’s current support for energy conservation and for using wind, solar, geothermal, biomass and other renewable energies to make electric power.

The environmentalists propose that the utilities give up all control over electricity generation and transmission, leaving them primarily as distributors of power to customers’ meter boxes. Fees to continue subsidies for low-income customers and to encourage renewable fuels and energy conservation would be levied as part of the charges customers paid for the electric lines--as opposed to the power that flows over the lines.

In their plan, selling the utilities’ interest in the transmission grid--the interconnected network that carries power over long distances--would release cash to resolve one big sticking point in any deregulation: what to do with existing, high-cost generating investments such as nuclear plants and older contracts between utilities and independent power producers.