In Washington, D.C., Bruce F. Webster, an information technology expert witness, wasn't aware how much his heating costs had risen this winter until he was asked to take a look and discovered a 30 percent hike.

Hong Cheng, assistant professor of communications at Bradley University in Peoria, IL is going to need the extra income from his new tenured associate professorship effective next fall. He's been lowering the thermostat to offset the cost of gas heating bills as much as 50 percent larger this winter.

Winter in Fargo, ND this year hasn't been any better or worse than most winters and real estate agent Sandra Kay Holte has used the same amount of natural gas to heat her home. Unfortunately, her first bill this year reflected a whopping 300 percent increase in the cost of natural gas.

"This is statewide throughout North Dakota and Minnesota. They claim they are just passing on the cost of doing business," said Holte, fuming.

Most Americans are also fuming over higher energy costs.

Divided on Drilling, a CBS News Poll to check the nation's pulse on solutions for higher energy costs reports eight out of 10 Americans saw energy bills rise this winter -- 61 percent said bills rose substantially, while another 21 percent said they are only paying a little more to keep warm.

California -- suffering more than a month of consecutive days of rolling blackout alerts -- is among western states where increases are highest, but the crisis is spreading, according to the CBS poll, a telephone survey of 1,124 adults nationwide conducted February 10-12.

Deregulation gone awry gets much of the blame in California. A harsh winter, more demand from the growing high-tech economy and an aging power generating and delivery infrastructure are also contributing to the tarnished glitter in the Golden State.

And many consumers don't get it.

Webster has suffered utility bills that are 1,000 percent higher this year than last year, but not all of it is due to higher costs.

"I've actually dug out my bills. The price is only a 30 percent or so increase. So, the higher bills are mostly my own fault. I got to turn down that thermostat at night. On the other hand, it has been an exceptionally cold winter up until the past few weeks or so, so it's either warm the house or freeze," Webster said.

Consumer groups also site the federal government's inaction for helping spread the problem.

"While Federal policy makers sit on their hands and do nothing, the disastrous consequences of electricity deregulation are spreading across the country," said Dr. Mark Cooper, director of research with the Consumer Federation of America.

"Tomorrow (Feb. 9) Pennsylvania takes up a huge rate increase for some the customers of one of its utilities that has been afflicted by a problem similar to the California mess," Cooper said.

The federation along with Consumers Union, publishers of Consumer Reports, recently called on the federal government to take pro-active measures to head off blackouts outside of California and increased costs that could come with hot weather this summer.

The two consumer advocate groups say, while conservation must become a way of life, states also have a responsibility to hold the line on consumer protection, retain retail price caps and reconsider deregulation.

"The Texas market has not even opened yet and utilities here are already saying our price cap is too low and should be adjusted to prevent California-type losses. If utilities already know deregulation means higher prices, why are we going forward with it at all?" asked Janee Briesemeister, a senior policy analyst in Consumers Union's Austin, TX office.

The two groups proposed numerous actions to combat the problem on both state and federal levels.

• Stop the deregulation clocks. States that haven't started deregulation shouldn't and states in progress should stop unless the market warrants the need for and can support deregulation.

• Price it right. The Federal Energy Regulatory Commission should reconsider market-based pricing for markets where effective competition doesn't exist.

• Punish price gougers. State and federal regulators need to develop aggressive discipline policies for suppliers who abuse market power and position.

• Reign in power brokers. Electric and gas power brokers should be subject to the same kinds of rules applied to financial transactions like stock sales.

• Cap prices. Enforced price caps are necessary to protect consumers from wild price fluctuations and other market anomalies.

• Transmit power independently. Public authorities should oversee electricity transmission independent of all market participants.

• Program conservation. Deploy more effective programs for short-term reductions in demand among commercial and industrial customers.

"We have been warning policy makers for years that the electricity market is not suited for deregulation and the failure to move cautiously is costing consumers billions," Cooper said.

"Without vigorous federal policies to open the transmission network and prevent the abuse of tight markets, consumers will pay billions more in unjustified overcharges," he added.

For more articles by Broderick Perkins, please press here.

Published: February 20, 2001

Use of this article without permission is a violation of federal copyright laws.

A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.