Senator ‘Outraged’ : SDG&E;, SCE Pull Out of Hearing, Anger Senator

San Diego Gas & Electric Co. and SCEcorp, the parent company of Southern California Edison, have unexpectedly pulled out of a state Senate hearing called to review mergers in the utility industry, an angry committee chairman announced Wednesday.

State Sen. Herschel Rosenthal (D-Los Angeles), declaring he was “outraged” by the last-minute withdrawal from Monday’s hearing in San Diego, said he is considering issuing a legislative subpoena to force the two utilities to attend.

“SDG&E; and SCE have talked to the press, the Public Utilities Commission, the courts and other affected groups” about their proposed mergers, Rosenthal said. “Why won’t they talk to the legislators?”

The utilities might be “pursuing private deals behind closed doors,” according to Rosenthal, chairman of the Energy and Public Utilities Committee. “Their sudden arguments for not appearing before legislators are not convincing in light of their past public statements. Why won’t they talk to the legislators?”

Rosenthal scheduled the hearing in August as part of a review of PUC regulations that govern mergers. At the time, both utilities agreed to attend, he said. Both utilities had, in recent weeks, restated their intentions to attending the meeting, according to Rosenthal.

The Senate committee might draft new legislation if existing regulations are insufficiently stringent to protect “ratepayers, utility employees, shareholders and the communities involved,” a committee spokesman said.

SCE and SDG&E; representatives on Wednesday maintained that federal Securities and Exchange Commission regulations prohibit their executives from appearing at the hearing.

SDG&E; will remain silent until after the commission approves a joint proxy statement being prepared by SDG&E; and Tucson Electric Power, said Maurice Luque of SDG&E.; SDG&E; and Tucson Electric announced their proposed merger last June.

Similarly, SCE is bound by federal regulations because it has informally advised the utilities commission of its intention to merge SDG&E; into its Southern California Edison subsidiary, said Lewis Phelps of SCE.

Discussion Canceled

SCE withdrew from the hearing “because regulations restrict what we can say,” Phelps said. SCE also blamed those federal restrictions for the cancellation of a merger discussion it had planned to conduct last week with analysts at a utility industry forum in Arizona.

“We called 180 analysts who were expected to attend our luncheon and told them discussion of the merger was off limits,” Phelps said.

SDG&E; on Tuesday night advised Rosenthal of its decision not to attend the hearing. SCE made its decision Wednesday morning, Rosenthal said.

The Senate’s Energy and Public Utilities Committee scheduled the San Diego hearing shortly before SDG&E;’s board of directors rejected a $2.16-billion stock-swap offer by SCE.

SDG&E; has instead moved to complete its merger with Tucson Electric. Rosemead-based SCE has gone to court to gain access to SDG&E;’s shareholder list as a possible prelude to a hostile takeover attempt.