San Francisco ? No stranger to sequels, Gov.-elect Arnold Schwarzenegger hopes to sell California on the virtues of electricity deregulation again, despite the fiasco the first time around.

The action hero’s energy advisers said they would bring a fresh approach to deregulation this time, avoiding the mistakes that led to rolling blackouts, insolvent utilities, market manipulation and a $20 billion debt that customers will spend the next decade repaying.

“We have a system that is broken, with pieces laying on the ground that need to be picked up and put back together again,” said James Sweeney, a Stanford University professor who helped write Schwarzenegger’s energy plan.

Deregulation critics are unnerved by Schwarzenegger’s proposal, arguing it would expose California to major risks at a time the financially strapped state cannot afford to gamble.

“It looks like he wants to put us back on the roller coaster of a very dangerous experiment,” said Public Utilities Commissioner Loretta Lynch, who dealt with California’s energy turmoil in 2001.

In his campaign, Schwarzenegger depicted high electricity bills as a drag on the state’s economy. And “the current bureaucratic rules are making the crisis worse, instead of better,” he said on his Web site.

It is unlikely electricity deregulation will be at the top of Schwarzenegger’s agenda. He has an $8 billion budget deficit to deal with and may have to defeat a legislative bill and a ballot-box initiative seeking to reregulate the electricity market.

The first overhaul was signed into law in 1996 by then-Gov. Pete Wilson, now a Schwarzenegger adviser. The changes were hailed as a way to lower prices by fostering more competition in the electricity market.

But through June, California households paid rates 44 percent above the national average and 64 percent above the average in 10 neighboring Western states, according to the U.S. Energy Information Administration. The disparity is greater for businesses, with average rates 57 percent above the national average and 91 percent above those of neighboring states.

California lacks the power plants to meet long-term needs. Without more market incentives to expand generating capacity, energy shortages could hit between 2006 and 2008.