SDG&E; Retains South Laguna Franchise

In what Mayor Dan Kenney termed as “Round 4 of the utility wars,” the Laguna Beach City Council voted unanimously Tuesday night to award a five-year franchise for electrical service in South Laguna to San Diego Gas & Electric Co.

With more than 125 people packing the Council Chamber, the council rejected a request by Southern California Edison Co. to reconsider electrical service in the area, which was annexed by the city in December and is currently served by SDG & E.

Edison officials arrived with petitions bearing 1,000 signatures from South Laguna residents demanding that the City Council reconsider its May 3 decision to retain SDG & E as the utility in the area. And residents--some of them wearing “We Prefer Edison” buttons--also spoke in favor of Edison and asked the council to give further study to changing the utility service.

5-Year Franchise

But the council voted 5-0 to enter into a five-year franchise agreement with SDG & E, City Clerk Verna Rollinger said. In a second action, the council also voted 5-0 to authorize City Manager Ken Frank to enter into an agreement with SDG & E on putting utility lines underground along Coast Highway in South Laguna.

The council first entertained the idea of changing utility companies in South Laguna earlier this year, after some residents complained that the rest of Laguna Beach--which is served by Edison--had lower electric rates.

Edison residential customers now have an average monthly bill of $42.87, compared to SDG & E’s $52.78 a month, based on 469 kilowatt hours.

Last month, SDG & E officials asked approval of the state Public Utilities Commission for an annual $30-million rate cut and for permission to eliminate a $4.80 monthly customer charge, or a 5% decrease for Orange County customers.

The request comes before the PUC next month, but some consumer advocates say SDG & E would have to increase its rates in 1990 to compensate for the reduction.

Edison officials alerted council members to that criticism and suggested that they may have been too hasty last month in agreeing to retain SDG & E because of the proposed rate decrease.

But SDG & E officials said the company’s sales growth will coincide with the rate decrease and that no rate increase will be needed in 1990.