NO LIGHTS, NO GLORY FOR STATE REGULATORS NEW APPOINTMENTS MAY ESCHEW BLAME GAME, FIX POWER SYSTEM.

Byline: Richard Nemec Local View

LITTLE noticed by voters or political insiders in Sacramento is a growing conservative bent to the state regulatory commission overseeing California's often-confounding energy matters.

The subtle shift is a late election-year accommodation of sorts by our incumbent, middle-of-the-road Democratic governor.

For the energy and free-market purist, the first reaction might be to roll the eyes and ask why this epiphany didn't occur earlier in Gray Davis' now 3 1/2-year term?

I am unsure why it was not done while the state had a surplus-deep economy passing some of the world's top 10 national economies, but I guess we should be thankful for little favors, even when they are late in coming.

Let's remember that Democratic do-gooders at both the state and federal levels oversaw the state's recent electricity free-fall. President Bill Clinton was still in the White House, and Gov. Davis had named one of his political loyalists to be president of the five-member California Public Utilities Commission.

While pointing the fingers East and West, California's two major electricity providers from the private sector became insolvent and the state had to step into the lurch to buy bulk electricity supplies.

Most people know the rest of the story. The state is still in the electricity business; state coffers were raided for more than $6 billion of the long-gone budget surplus, the two private-sector utilities are still trying to get their good credit ratings back, and major law firms have had to hire extra help to keep up with the plethora of lawsuits and regulatory appeals in Washington, D.C., and throughout the Western states.

The two most recent additions to the CPUC over the past 18 months - replacing two Republican, pro-market commissioners - carry a pragmatic, light-handed regulatory approach. And as the state's electricity industry tries to right itself nationally - not just in California - it will take a defter touch than the governor's first two old-line liberal appointees have been able to muster.

Rather than a ``get-the-bastards'' approach following the continuing revelations of corporate boardroom chicanery - in and out of the energy industry - we need to overcome the culprits, punish the guilty and get on with restoring markets that will brighten the state's (and nation's) now-dazed economic engines.

State regulators often are miles apart in their views, as they once again demonstrated at a regular business meeting in San Francisco recently.

Ironically, this is a time when there is an extreme amount of heavy lifting they need to do the rest of this year - before two of the current commissioners' terms expire.

It is time to suck it up, stop the bickering and delay tactics, and pave the way for restoration of utility financial health, an exit by the state from the energy-buying business, and a straightforward approach to the politically uncomfortable need to keep today's high retail rates in place another year.

As it looks now, the only way to accomplish all that is to rely on a new loose coalition of strange bedfellows - a Republican appointee with a banking background, a surprisingly moderate Democratic attorney who headed San Francisco's elective Public Defenders Office for 22 years, and a former labor economist who most recently had become a millionaire energy industry entrepreneur after heading one of the state's largest utilities as its president.

Aside from their political and career path differences, what Henry Duque, Geoffrey Brown and Michael Peevey agree on most is a desire to apply common sense and get the job done for the good of consumers, the economy and the energy providers.

Politically, this is a near-impossible job on any major issue.

It is easy for most disinterested consumer-voters to respond with a ``say what?''

They know about the latest peccadilloes of the Enrons, Arthur Andersens and WorldComs and don't see how a bunch of underpaid, overworked state and federal regulators can make a difference. They can, but if they are really doing their jobs right, no one notices.

I doubt that even with the certifiable attempts to game the wholesale energy markets to gain a competitive business advantage that California would have ever had a crisis, if the CPUC under Davis two years ago would have treated the wholesale electricity price spikes as a market aberration needing: (a) immediate regulatory Band-Aids (rate increases), (b) the state's industry restructuring plan needing medium-term changes to prevent the price volatility, and (c) long-term work with (not blaming) federal regulators to create the safeguards and incentives required for energy markets to work.

In retrospect, those markets, with some price and monitoring measures, for the most part have worked the past 12 months. Prices were stable and supplies adequate in the recent series of record heat waves that hit the Midwest, East and most recently the West.

The only major hurdle left is the so-called hangover of multibillion- dollar debts owed by the private-sector utilities and the state. The regulatory commission needs to use the current high retail rates to get those paid off.

Californians, I think, are willing to continue to pay to keep the lights (and the computers) on.