In defeating a referendum to sell Cleveland's municipal power system (Muny Light) on Tuesday, voters of that city have signaled what may be a new era of urban populism: an era that could have a major impact on how, and by whom, our cities are governed.

In supporting Mayor Dennis Kucinich's fight to keep Muny Light under city ownership, the voters also endorsed recent charges by the Nuclear Regulatory Commission that the privately owned utility in town -- Cleveland Electric & Illuminating (CEI) -- had done all it could to sabotage Muny Light and force its sale to CEI.

Several federal bank regulatory agencies and the Justice Department are investigating the role of the city's largest bank, Cleveland Trust, in Cleveland's Dec. 15 default on nearly $15 million in notes held by Cleveland Trust and five other banks.

It has been alleged that Cleveland Trust -- which has a financial interest in CEI -- attempted to force the city to sell Muny Light to CEI before it would roll over the city's $15 million debt. Although Cleveland Trust held only about $5 million ofthat debt, the five other banks followed suit.

The Cleveland vote has fueled those federal investigations. And now at least one congressional committee is planning hearings in May into CEI and Cleveland Trust's relationship and allegations that they tried to hold the city up.

The vote is also the second major victory in recent weeks for advocates of public-owned power.

Earlier this month, 10 small cities in the Midwest won a $12.1 million judgment against the American Electric Power System and two of its subsidiaries. The 10 cities had alleged that A.E.P. was trying unfairly to force their municipally owned utilities out of business in order to take over their operations.

In a statement released yesterday, Alex Radin, executive director of the American Public Power Association, said the Cleveland vote has "national significance."

"Nationally, the vote should be a signal to power companies elsewhere that they will not be rewarded for anticompetitive activities," he added. "Municipal electric systems throughout the nation can benefit from the action by the City of Cleveland in its fight against practices which have been branded by the NRC as anticompetitive."

Cleveland's vote against the sale of Muny Light also will mean that the city can pursue its $330 million antitrust suit against CEI, which would have been settled as part of a sale.

In that suit, the city alleges CEI attempted to drive Muny Light out of business with several types of anticompetitive and monopolistic practices.

In a telephone interview last night, Kucinich said his victory "should be a signal to neighborhood groups and cities across the country that coalitions built on economic issues are winners."

Kucinich says he is now planning to sell up to $15 million in municiapl bonds in small denominations -- as low as $100 each -- to the public in an attempt to raise money to pay the city's debt.At Tuesday's election, the voters helped by approving a Kucinich plan to increase the city income tax from one to 1.5 percent.

Garden State Paper Co. Inc., a subsidiary of Media General of Ichmond, was honored yesterday for outstanding achievement in the 1979 Environmental Industry Awards.

Garden State was one of four firms chosen to receive honors at the Environmental Industry Council's annual conference at the Mayflower yesterday.

The awards are cosponsored by the President's Council on Environmental Quality and the ETC.

Garden State, the world's largest recycler, was honored for its recycling efforts. The firm now reclaims almost a half million tons of used newspapers a year, recycling them into about 10 percent of all the newsprint manufactured in the U.S.

According to CEQ chairman Charles Warren, the company saves energy in the process, helps curb air and water pollution, preserves the pulpwood supply and conserves about 1.5 million cubic yards of landfill space that would have been needed to dispose of the papers.

The other companies honored were:

Glass Containers Corp. of Dayville, Conn., a division of Nortion Simon Inc., won for opening "the way to more extensive recycling of glass containers."

GCC, which was the subject of an earlier Washington Post story about its recycling efforts, has the largest glass recycling operation in the nation.

The company developed its own system of cleaning and using waste glass in making new bottles. Besides recycling glass, the process also cuts air pollution to the point where the company has been able to avoid the purchase of expensive pollution abatement equipment.

Uniroyal Chemical, a Naugatuck, Conn., division of Uniroyal Inc., was cited for finding a better way to dispose of dangerous liquids used in rubber chemical manufacture.

Gould Inc. was named for reducing drastically the discharge of electroplating wastes at its Ohio metal foil company plant on the Muskingum River.

The company was cited particularly for protecting Muskingum River clams by using an unusual reverse osmosis cleansing process which requires much less water to be taken from the ground than traditional wastewater treatment methods.