By JOHN CRONIN

State by state, government regulators are trying to reform the electric utility industry. They should spend some time reforming themselves as well.

The goal of utility deregulation is to allow consumers to buy electricity from the power company of their choice, thereby spurring competition, reducing electric rates and encouraging development of clean, efficient power plants to replace dirty, costly ones.

But unless there is a tightening of power plant siting laws, deregulation could bring a glut of plants, each fighting to put the other out of business like a strip of suburban shopping malls that all offer the same goods.

Historically, consumers could buy electricity only from the utility servicing their area.

To obtain permission to build a new plant, the utility had to demonstrate a need for more power. Environmental impacts were a trade-off measured against public necessity.

A free market for electricity production eliminates need as a criterion. The number of power plants will mainly be limited by the willingness of energy developers to risk capital or undercut competition. In the energy industry, deregulation is being promoted as the get-rich-quick opportunity of the millennium.

According to boosters like Richard A. Abdoo, chairman of Wisconsin Energy Corporation, "Any company should be able to build a power plant and compete in the marketplace to sell power from that plant."

Most states are not equipped to deal with this new regulatory landscape. Consider these two very different controversies.

The U.S. Generating Company, a subsidiary of Pacific Gas and Electric, has proposed a new power plant on the Hudson River at Athens, N.Y. It has applied for a "certificate of environmental compatibility and public need," as required by a state siting law that dates back to 1972.

But the quaintly titled certificate has become something of a joke.

The Athens plant was proposed after deregulation and is exempt from proving that the area needs more power. As to environmental compatibility, existing Hudson River power plants already kill too many fish. The company claims that the efficiency of its plant will force the older river plants to cut back on energy production and therefore kill fewer fish and create less air pollution. It has offered no concrete proof, however, and the siting law requires none.

Environmental groups, including my own, oppose the Athens plant, arguing that it should physically replace an older existing one.

Again the siting law does not require consideration of such an alternative. The site for the plant is directly across from the historic Olana mansion.

In Connecticut, the Millstone nuclear plant, operated by Northeast Utilities, has reduced the Niantic River winter flounder population by 23 percent, according to the state's Department of Environmental Protection. When environmental groups sued to prevent the plant from being restarted after a shutdown, they lost on the law though the judge found merit in their claim that the impact on the fishery was actually 60 percent. Connecticut has yet to take action of its own.

States like Connecticut and New York must reform their power plant siting laws to require obsolete plants to match the technology and performance of newer plants or be shut down. New plants should be constructed on the sites of the old.

Technological advances in protecting air and water should become the basis for enforceable environmental standards applied industry-wide.

Without these protections, deregulation will almost certainly inflate the electricity supply by increasing the number of plants, whether they are needed or not, and artificially lower energy bills. Plants will go out of business, but not before leaving their ugly mark on land, air and water.

The utility industry is the nation's single largest killer of fish and polluter of air. Deregulation can end that legacy, but only if states turn their fervor for reform on their own outmoded laws