UTILITY BILLS MIGHT RISE FOR RESIDENTS.

Byline: Rick Orlov Daily News Staff Writer

Residential power rates in Los Angeles could increase with deregulation of the electric industry, officials say.

The question is how much - and when.

With Tuesday's decision by the state Public Utilities Commission to allow deregulation to begin in California on Jan. 1, the Los Angeles Department of Water and Power - the nation's largest municipal utility - faces new urgency to deal with competition for the first time in its history.

DWP officials say the utility, in pursuing alliances to sell excess energy, can compete with private companies that are positioning themselves to enter the market.

Of most concern, however, is the impact on the DWP's 1.2 million residential customers - subsidized for years by higher prices on industrial users - and whether they will see a rate increase.

``That's the concern we all have,'' said Councilwoman Ruth Galanter, who is chairing a special committee overseeing the DWP's transformation. ``None of us want to put the cost of this on the back of the residential ratepayers. We're all ratepayers too.

``What concerns me is companies are going to come in and say they will have lower rates, but that won't mean anything if people look at the surcharges. What they should be looking at is if they have lower bills.''

Officials have said that if DWP residential rates do rise, they still will be substantially lower than those now charged by privately owned utilities.

DWP customers now pay 9.8 cents per kilowatt-hour, with an average monthly bill at $49.90, the lowest in Los Angeles County. A preliminary report from the DWP said residential rates should be increased at least 1.5 cents a kilowatt-hour, adding $9 a month to the average bill.

In contrast, Southern California Edison Co. officials have said they plan to reduce their residential rates - now 25 percent higher than the DWP's, with monthly bills averaging $66.20.

Galanter and others worry whether the DWP will be in a position to compete with private firms such as Edison and Enron Corp. for the industrial consumers - like USC and UCLA.