Towers of powder ponder the level playing field.

• Position: Utilities - Industry Overview

Traditionally, utilities - both protected and trapped by government regulation - were as dull as dish water. But on the upside, you weren't likely to take a bath investing in them. Nowadays, in a climate of increasing deregulation and change, all that could be put to the test.

1996 will see competition for local telephone service, which will likely bring an array of electronic-information services to North Carolina residents. Southern Bell and other local providers backed a bill last year that traded monopoly status in individual markets for the N.C. Utilities Commission's agreement to stop regulating their profits. Instead, local phone rates will be regulated.

In other states, local-phone monopolies have fought anyone trying to take their turf. But North Carolina carriers realized Congress was going to allow competition anyway, says Dan Long, a telecommunications attorney with the commission. "I think they recognized that this is an idea whose time has come. The [North Carolina] bill is balanced - it sets up a structure for competition but has the pricing flexibility that they wanted."

It hasn't taken long for competitors to move in. Time Warner Communications, which owns cable-television franchises in Raleigh and Charlotte, and MCI Metro, a long-distance provider, have applied to the commission to offer phone service in markets they serve.

Duke Power Co., Carolina Power & Light Co. and others are mobilizing for the new marketplace that deregulation will create for electric utilities. Raleigh-based CP&L, with industrial rates higher than Charlotte-based Duke Power, would be particularly vulnerable to what's called "retail wheeling" - an effort by industry to change regulations so large users can buy power from other producers.

It would not only allow industries to shop for power but require local utilities to transmit - "wheel" - it along their lines to defecting customers. Officials at both CP&L and Duke Power must have breathed a sigh of relief in July when the N.C. Utilities Commission rejected a proposal by an industry group to begin formal hearings into retail wheeling.

Duke Power created an Associated Enterprises Group in 1994 to oversee the company's real-estate, power-plant-development, telecommunications and other subsidiaries. Last fall, Duke announced it would cut its 16,100-member work force by 900 by April - the fourth round of cuts since 1988. Carolina Power & Light has trimmed 1,000 workers in the past decade, leaving it...