Bill Would Require Voters’ OK of Merger

Calling the proposed merger of San Diego Gas & Electric and Southern California Edison an “immoral” business deal, Sen. Larry Stirling unveiled legislation Monday that would require the approval of San Diego County voters before the transaction could advance.

The measure also would permit the San Diego County Water Authority to produce and sell gas and electricity and sell bonds to finance a public takeover of SDG&E; if the voters approved, Stirling said.

But Stirling, a San Diego Republican, was promptly exposed to an unsolicited preview of how hard it will be to guide his bill through the Legislature.

A luncheon news conference sponsored by Stirling that included San Diego Mayor Maureen O’Connor was crashed by Assemblyman Steve Peace, who showed up uninvited and criticized the bill and the strategy Stirling and the city have charted to block the utility merger.

Peace, a La Mesa Democrat, said the water board is the wrong agency to promote as a potential municipal power district because it is an appointed body he believes is controlled by real estate developers. Those developers want to control both water and power in San Diego so that they can ensure a steady supply of cheap electricity for pumping water and for desalination of sea water, thus allowing growth to continue at its current rapid rate, he said.

Peace also suggested that the highly charged, public way in which the issue has been handled by San Diego political leaders may make it more difficult to win votes in the Legislature.

Comments ‘Unfortunate’

“Their fear of being stampeded or the opportunity for political capital has interceded to turn this into a circus,” Peace said. “It is very easy for the San Diego delegation (in the Legislature) to win the politics and lose the war.”

Stirling classified Peace’s comments as “unfortunate” and said he thinks his bill offers the best approach for heading off the merger of SDG&E; and Rosemead-based Southern California Edison. He said he might consider amending the bill or introducing follow-up legislation to make the water board, which he would rename the San Diego Water and Power Authority, more accountable to the voters.

If approved by the Legislature and signed by the governor, Stirling’s bill would apply statewide, requiring an election any time one public utility tried to take over another. The election would be held in the service area of the smaller utility. Other provisions in the bill would require any water authority taking over a utility to compensate local governments for the loss of property-tax revenue previously paid by the investor-owned utility.

An Edison takeover of SDG&E; would mean the loss of local control over San Diego’s energy supply and would probably mean higher utility rates, dirtier air, poorer service and worse working conditions for those utility employees who did not lose their jobs in the merger, Stirling said.

He also criticized SDG&E; executives and board members for advancing the interests of the company’s stockholders at the expense of local ratepayers.

“They are trustees of a public monopoly,” Stirling said. “They exist solely to provide a necessity of life for the health, safety, welfare and income of the people of SDG&E;’s service area. For them to put the stockholders’ profits above the health and welfare of the ratepayers is an immoral decision.”

O’Connor said Stirling’s bill is needed to head off what she described as a “hostile takeover.”

She said that Edison and SDG&E; will use their considerable influence to try to muscle the merger through the Public Utilities Commission and to fight off any legislative attempt to help block the deal.

Open to Suggestions

O’Connor said she is open to suggestions from Peace and others about the best way for the government to take over SDG&E.; But she was adamant about the need for an election to decide the fate of Edison’s proposed merger with SDG&E.;

“Let the voters decide,” she said. “It’s the voters who are going to be paying the bills. We feel very strongly that we should participate in this decision.”

O’Connor said a public vote would render useless the hundreds of thousands of dollars in campaign contributions and lobbying costs expended by Edison and SDG&E; each year, which she implied give the utilities undue influence in the Legislature and at the PUC, whose members are appointed by the governor.

“You can’t buy off a whole city,” O’Connor said. “You can try, but it’s much more difficult. Democracy is the best thing we have going for us.”

Mary Wood, an SDG&E; attorney, said in a telephone interview from San Diego that she expects the utility to fight Stirling’s measure in the Legislature.

She said she believes it would be unwise and perhaps unconstitutional to take control of the merger out of the hands of the PUC and give it to the people.

“I worry about elections because things tend to be hit on the surface only,” she said. “You get into these 30-second sound-bites that sound great, but whether you get to the issues and get good decisions is another question.”

Wood also said the idea of a public takeover of SDG&E; ought to be set aside while the Edison-SDG&E; merger is considered.

“I don’t think municipalization is a good idea under any circumstances,” she said. “Utilities have to make long-term, good business decisions. When you politicize that process you may not get good business decisions.”

Stirling, despite Peace’s objections, said he still expects to win the support of the entire San Diego County delegation in the Legislature.

He said Assemblywoman Lucy Killea (D-San Diego) had signed on as a co-author of the bill, and O’Connor said Sen. Wadie Deddeh (D-Bonita) told her he would support the measure.