Ex-SDG&E; Board Member Says Merger OK Unlikely
O. Morris Sievert, who last month resigned from the San Diego Gas & Electric board of directors to protest a proposed merger with Rosemead-based Southern California Edison, on Tuesday expressed doubts that regulators will approve the $2.4-billion merger.
“It is difficult to believe that (regulators) would ultimately consider the merger in the public interest,” he said in a four-page statement released by his attorney. Sievert’s statement marked the first time that the San Diego-based business consultant has explained why he felt it necessary to resign from the utility board that he joined in 1976.
Sievert suggested that the state Public Utilities Commission would reject the proposed merger, largely because of “various city and county objections and takeover efforts.”
‘Power Purchasing Monopoly’
Sievert also predicted that utilities in Arizona and New Mexico will strongly oppose the proposed merger because it would create “a power-purchasing monopoly.”
Even if regulators approve the proposed merger, “federal agencies could drag out any action for an extended period of time, even beyond the 12 to 18 months now predicted” by Edison and SDG&E.;
Many of SDG&E;'s “best people” would probably resign because of uncertainties created by those extended hearings, Sievert said. “The shareholders would be negatively impacted” by that loss of management talent, and SDG&E; would become a “substantially weakened company,” Sievert maintained.
Negative Reaction Anticipated
Sievert said he expected a wave of “negative public reaction” after the board’s decision to accept a merger offer from SCEcorp. But he maintained that SDG&E;'s managers do not “recognize the profound impact . . . that will result as they become a relatively small branch of a very large corporation headquartered in a suburb of Los Angeles.”
Sievert said he ignored advice from SDG&E; advisers, who maintained that the utility’s directors could only consider “their fiduciary responsibilities to the shareholders.”
Sievert said he “believed from the outset that the loss of SDG&E; headquartered in San Diego would be a disaster for the city and county of San Diego.”
Michael Shames, executive director of Utilities Consumer Action Network, praised Sievert for going public with his objections to the merger.