Public Power Group Urges Panel to Reject SDG&E-Edison; Merger

San Diego Gas & Electric Co.’s proposed merger with Southern California Edison would have a “substantial and adverse impact” on utility competition in the Western United States, according to the American Public Power Assn.

The Washington-based group Thursday asked federal regulators to reject the proposed merger “as it is now structured” or give municipal utilities increased access to the massive web of electric transmission lines that a combined Edison and SDG&E; would own, power association attorney Alan H. Richardson said. The association represents many of the nation’s 2,000 publicly owned utilities.

“We’re asking the (Federal Energy Regulatory Commission) to take into account the needs of all utilities in the Southwestern region,” Richardson said.

Grown in Importance

Transmission access has grown in importance to municipal utilities and would be of tremendous importance should a government agency in San Diego acquire SDG&E;’s existing system in order to stymie Edison’s proposed merger.

Municipalities “quite often are like islands in the middle of an investor-owned utility,” Richardson said. Too often, municipal utilities that can buy power elsewhere are stymied because investor-owned utilities won’t carry that power on their lines, Richardson said.

The power association has asked federal regulators to institute transmission guidelines similar to those included in the recent merger between Pacificorp, a Portland-based utility holding company, and Utah Power & Light, a Salt Lake City-based utility. Federal regulators have demanded that the resulting utility make transmission space available to municipal utilities and other electric power companies.

Shortly after that order was signed, Edison began “a barrage of objections,” Richardson said. “Edison has orchestrated objections from a number of other investor-owned utilities who are seeking to modify the (Pacificorp) order or find ways to ensure that a precedent was not established.”

Edison, a wholly owned subsidiary of Rosemead-based SCEcorp, “did oppose that order, along with a number of other utilities,” Edison spokesman Lewis Phelps said Thursday. “We thought it would be detrimental to the interests of our (electric) customers.”

Should Set Precedent

The power association, which was joined by the National Rural Electric Cooperative in the Thursday filing, maintained that the Pacificorp order should set a precedent because “nationally, there are other (investor-owned) utilities that also will be seeking to merge . . . and the same questions will arise,” Richardson said.

Historically, “individual utilities have built their own transmission lines with little thought for other utilities in the region,” Richardson said. “But we’ve got to think in broader terms . . . and transmission is the key.”

“You cannot increase competition in this industry by adding more producers of power,” Richardson said. “You have to have transmission access.”

The energy commission is one of half a dozen federal and state regulatory agencies that must approve Edison’s merger with SDG&E.; Edison shareholders will vote on the merger at the company’s regularly scheduled annual meeting April 20. SDG&E; shareholders will vote on the merger at a meeting April 18.