California, which passed its deregulation law last fall, will enable corporations, universities and other big customers to choose their energy provider in 1998.

As more states adopt deregulation laws, other companies are likely to follow suit.

"We also have the option of buying back our own facilities under the deregulation laws," he said.

Edison, with 4.3 million customers, ran up a debt of $3.9 billion as it paid higher wholesale costs for power under California's deregulation law.

Aside from setting up competition, the deregulation law mandates a 10 percent cut in rates among existing utilities by the year 2002.

California's four-year-old deregulation law has allowed the power producers to grab a larger share of generation capacity than in most states.

California's deregulation law freed the wholesale market from government price constraints.

The problem was exacerbated because the utilities have been prevented, under the deregulation law, from passing on the price increase to their customers.

John Stanziola, the executive director of the utilities board, said it was too early to determine if the deregulation law would work as intended.

Before passage of the deregulation law, there had been only one Stage 3 rolling blackout declared.