With coal reserves dwindling rapidly in the Midwest, the battle to determine whose power gets cut off first has begun.

Due to a complex regulatory structure, the responsibility of pulling one plug before another - industrial users before residential users, for example - rests with the states.

Unless, of course, there is a judgment by federal energy regulators that an emergency situation exists. At that point, the Federal Energy Regulatory Commission can, under the Federal Power Act," order such temporary connections of facilities and such generation . . . of electric energy as in its judgment will best meet the emergency and serve the public interest."

The confusion results because the federal government controls wholesale sales of power - to municipalities that own their own power companies, for example - while the states control retail sales from area power companies directly to customers.

The federal regulatory decisions do have some effect on final customers, though since the municipalities they govern directly serve urban populations. Possible federal intervention has upset industry representatives, however.

In New York yesterday, two energy industry spokesmen said there was no need for a federally-run power system. Edison Electric Institute President W. Donaham Crawford and Cleveland Electric Illumination Co. President Karl Rudolph told a group of security analysts that the present national grid system is adequate.

"Those who urge a federally-financed grid are really talking about duplicating our system," Crawford said.

In a meeting in Cleveland yesterday, federal and state regulators met with utility officals to "try and come up with a uniform approach to how to handle the shortages," according to Barry Yaffee, of the Energy Emergency Center of the Federal Energy Regulatory Commission.

Yaffe said the federal government has been working on plans in case it does have to assume control over the distribution of energy, "but we have no plans to do that now. We are bringing the states together to see how they can best use their limited resources."

Yaffe said each state has its own curtailment plan. "Usually," he said, "they set out what actions should be taken if the reserves get down to a certain level. The biggest difference between the states is in just how easy it is for the states to mandate cutbacks."

Some states have automatic curtailments as reserves drop to about 30 days supply - first public facilities, then businesses, then residences are cut in descending amounts, Yaffe said. But other require approval of the governor or the state legislature to actually implement such cutbacks.

In addition to setting priorities, the states have to deal with rapidly increasing costs of power by passing along, as quickly as possible, cost increases to the public. Many Midwestern states are now buying significant portions of their power from out-of-state utilities, and the cost of that power is considerably higher than the cost of generating their own power.

Indiana has one of the more stringent cutback plans, with mandated reductions at each utility when that untility's coal supply drops to 40 days.

Some parts of the state will reach that level this week. Educational institutions will be forced to cut back electrical use 50 percent, commercial and industrial users 25 percent and residences 15 per cent.

In addition, night sports events, museums, most outdoor lighting and after-hours building maintence will be eliminated totally.

In North Carolina, state employes will switch to a four-day week, retail operations will be limited to 60 hours a week, commercial and industrial firms will have to reduce a energy consumption 30 percent under a new plan when local coal supplies fall to 30 days worth.

In West Virginia, there has already been a 10 percent cut in industrial power use, with another 30 percent drop mandated for Monday. Residential users have not faced mandatory cutbacks there yet.