SDG&E; Creates Subsidiary for Diversification
San Diego Gas & Electric Co. took another step Thursday toward its planned diversification by consolidating its non-utility operations into one subsidiary that will not be regulated by the state Public Utilities Commission.
The subsidiary, Pacific Diversified Capital Co., will now oversee SDG&E;’s investment, land acquisition and real estate development activities, according to Stephen A. Edwards, manager of SDG&E;’s special projects.
SDG&E;’s diversification will expand existing and modestly active non-utility operations as well as develop new ventures, according to company officials.
To prepare for the diversification, SDG&E; in February realigned several top management slots and divided the company into two major components--utilities and non-utilities. A holding company to oversee both operations is also planned.
Pacific Diversified Capital, which has no full-time employees, is being managed by some SDG&E; officers on a part-time basis, Edwards said. “As we pursue our growth plans, more resources will be allocated” to Pacific Diversified, he said.
Co-generation, land development, engineering, laboratory work and consulting are all likely fields for expansion. In addition, SDG&E; might buy an existing company or a portion of an existing power supply, officials have said.
Named to the board of Pacific Diversified on Thursday were five of SDG&E;’s 13 directors. They include Malin Burnham, a real estate and insurance executive; Daniel W. Derbes, president of Signal Advanced Technology Group; Intermark Inc. President Charles R. Scott; consultant O. Morris Sievert, and Thomas Page, SDG&E; chairman, president and chief executive.
The five directors are all members of the SDG&E; board’s strategic planning committee.
Also on Thursday, SDG&E; said it will no longer sell original-issue common stock to its employee savings plan.
“The company does not need to raise additional equity at this time,” according to Margo Kyd, the utility’s financial services manager, who added that stock for the employee plan will now be bought on the open market.
Discontinuing the sale of original-issue stock for the plan will stop the dilution of shareholders’ equity because no new outstanding shares will be issued.
SDG&E; also said its plan to take delivery of 60 megawatts of geothermal power daily from
