Gray Davis' shortcomings as a political executive first became evident four years ago when he was paralyzed with indecision over a sudden run-up in wholesale power costs that strained the financial standing of California's major utilities.

At the time, retail rates were frozen under terms of an ill-conceived (and ill-named) utility "deregulation" scheme that had been enacted by the Legislature four years earlier, and utilities were mandated to buy virtually all of their power on the spot market. So when wholesale costs climbed sharply, contrary to expectations, the utilities began hemorrhaging money.

Utility executives and others urged Davis and the Public Utilities Commission to authorize the power companies to purchase juice on long-term contracts and stabilize their costs, but the first-term governor feared a backlash from consumer advocates because retail prices probably would have been adjusted upward a bit.

Six months later, with the utilities on the verge of bankruptcy, Davis did undertake power purchases on long-term contracts, with the state as the financial intermediary. But by then, the power market had soared and the contracts reflected much-higher prices then available - costs that consumers will still be shouldering for many years even though the power market has since declined.

In the aftermath of the energy crisis, Davis concentrated on shifting blame for the debacle to others and never even attempted to fix a badly broken system. He and the Legislature undid the 1996 legislation that lay under the crisis, but did not create a replacement energy policy.

Ever since, the state has limped along with a patchwork of piecemeal legislation, some intercession by the PUC and the decrees of a bankruptcy judge. The utilities are financially solvent again, but have sold off nearly all of their generating facilities. They must buy power from outside sources, but with relatively low wholesale prices and an uncertain regulatory climate in California, investors have backed away from new generating projects. Large commercial and institutional consumers, meanwhile, are still clamoring for the ability to bypass utilities and buy power directly from generators and brokers - a desire that fueled the original 1996 scheme.

Last week, Arnold Schwarzenegger, who was elected to clean up the debris of the failed Davis administration, turned to the state's lingering energy problems, urging the PUC to rapidly pass rules that would encourage the utilities to buy power on long-term markets while allowing large consumers to make their own deals. Schwarzenegger said he wants "an electric market structure that encourages healthy wholesale and retail competition which translates to system reliability and lower bills for both residential and business customers."

What Schwarzenegger wants, it would appear, is a cleaned-up version of the 1996-vintage scheme that preserves its positive aspects and eliminates its drawbacks - and that makes a lot of sense. There's nothing inherently wrong with deregulating electric power, if it's done the right way; it's worked in other states and other countries. The California version was flawed because it was a mishmash of goodies for powerful interest groups that didn't constitute a coherent whole.

If Schwarzenegger is to clean up the energy mess, however, he must maintain strong control over the entire process, and not allow single-interest groups to undermine it again. He's clearly seeking to bypass the Legislature because he knows it's a poor venue for comprehensive policy-making - as demonstrated by the piecemeal power measures that are kicking around the Capitol.

Assembly Speaker Fabian Núñez is carrying a bill that sets rules for "direct access" by large consumers, largely drafted by Southern California Edison, for example, while Senate Energy and Utilities Committee Chairwoman Debra Bowen is carrying another bill whose fine print, municipal utilities claim, will force their new customers to pay unjustified fees to Pacific Gas and Electric Co.

Piecemeal legislating created the crisis that Davis failed so miserably to manage. Only Schwarzenegger is in position to ensure that we do it right this time. With looming shortages of electricity, we may not get a third chance.