Times Poll : Utility Merger Strongly Opposed by San Diegans

San Diegans are strongly opposed to San Diego Gas & Electric Co.’s proposed merger with Southern California Edison, but they also have serious doubts about a public takeover of the utility, a Times poll has found.

Significantly, however, nearly half of those questioned said they are undecided about SDG&E;’s merger plans, despite months of acrimonious public debate. The large percentage of undecided residents offers advocates of both the merger and the buyout an opportunity to mobilize support behind their respective proposals in the coming months.

Even so, the poll suggests that SDG&E; and Edison executives may face a tougher selling job than supporters of a public takeover of the utility by the San Diego County Water Authority. Among San Diegans who have made up their minds on the issue, the merger is opposed by a 4-to-1 margin, while the public buyout option was disapproved by only a very narrow margin.

A major factor for those who are undecided will be which option is more likely to produce lower utility rates.

Merger vs. Buyout

When asked which alternative they would prefer if rates were guaranteed to go down, the poll’s respondents favored the merger over the buyout by 45% to 28%. Concern that governments are ill-equipped to run utilities--raising the specter of higher rates--was the major reason cited in opposition to municipalization of SDG&E.; However, by a 3-to-2 margin, those polled also expressed skepticism about the likelihood of utility rates being reduced under an Edison takeover.

San Diego’s historical anti-Los Angeles bent surfaced as one of the major reasons why people oppose SDG&E;’s merger with Rosemead-based Edison. Disapproval of the public buyout plan, meanwhile, stemmed in part from the widespread concern that municipalization would increase bureaucracy and be an unwelcome government incursion into private business.

Despite the fact that San Diegans have over the years consistently criticized SDG&E; for high rates and mismanagement, the poll showed that, by a more than 4-to-1 margin, people prefer its present structure to either the merger or a public buyout.

“If people had their druthers, SDG&E; would stay the same and these two other proposals would just go away,” Times pollster I.A. Lewis said.

The Times poll is based on telephone interviews conducted Sunday of 719 people throughout San Diego County. The poll’s margin of sampling error is plus or minus 5 percentage points.

Public sentiment won’t determine whether or not the merger occurs, but it will be an important backdrop to the Public Utilities Commission’s review of the SDG&E-Edison; deal. The public’s attitude also could influence the position taken by local politicians on the issue.

Proponents of both the merger and a public buyout said they were encouraged by the poll’s findings. Not surprisingly, both sides also argued that the results bode ill for their opponents.

“The No. 1 thing that comes through in those numbers is that the public doesn’t want this merger with Edison,” said San Diego Mayor Maureen O’Connor, who has vigorously opposed the proposed merger since it was announced last fall. “The fact that people are most interested in what happens to rates also is good from the standpoint of a public takeover. If people vote their pocketbooks, that’s a battle we’ll win.”

On the other side, Michael Peevey, Edison’s executive vice president, dismissed the strong opposition to the merger as “not very surprising, given the hostility of some politicians and other people” who, he contends, have dominated public debate on the subject so far. Predicting that the opposition will lessen “when we make our case,” Peevey drew encouragement from the poll’s finding that San Diegans prefer the merger over a buyout, assuming both options would insure lower rates.

“That’s extremely pleasing, because what it says is, all things being equal, the public would like to see SDG&E; stay under private ownership,” Peevey said.

With extensive governmental reviews of SDG&E;’s future ownership just beginning, the Times poll showed that those studies, which could last as long as two years, have an enormous potential for shaping public attitudes. Forty-five percent of those questioned said they neither support nor oppose the $2.4-billion buyout offer from Edison’s parent company, SCEcorp., while 50% were undecided about the possible public takeover by the County Water Authority.

Lopsided Margin

However, among those who have made a decision, the merger faces overwhelming opposition, although attitudes toward municipalization are relatively evenly split, the poll revealed. SDG&E;’s merger with Edison was opposed by a lopsided 44%-11% margin, with two-thirds of the opponents saying they “strongly disapprove” of the merger. In contrast, the possibility of a public takeover of SDG&E; drew a 27%-23% negative response.

The merger’s potential impact on local utility rates was the major explanation offered both in its support and opposition. Asked for the most important reason why they approve of the merger, 56% of the respondents said they believe that it would produce lower rates. On the other hand, 49% of the merger’s opponents said they fear that Edison’s takeover of SDG&E; would raise rates.

Rates played an equally significant role in determining attitudes toward the municipalization proposal, with 43% of that plan’s backers arguing that public ownership of SDG&E; would lower rates, making that response the No. 1 answer. Among opponents of municipalization, 23% said they believe utility rates would increase under public ownership, a finding that ranked third in that category.

The two leading objections to a public takeover, the poll found, are the belief that governments are ineffective in running utilities and that municipalization would increase government bureaucracy, answers offered by 53% and 35% of the respondents, respectively.

Another 16% described the public takeover plan as inappropriate government interference in private business, 10% said it would reduce local governments’ tax revenues and 6% predicted it would lower the community’s charitable donations by removing a major corporate donor. In regard to another question, public officials’ plans to spend more than a million dollars in taxpayer money to study the feasibility of municipalization was opposed by a 37%-20% margin.

Municipalization Issues

Behind lower rates, the next most important reasons given in support of municipalization were that public officials might be more responsive than private utility executives (40%) and that it would help protect local jobs (30%).

The merger proposal, meanwhile, drew strong support from people who said they believe that larger companies generally are more efficient and that Edison has access to more reliable energy supplies than SDG&E--answers; that again reflect hopes that the merger would generate lower rates.

San Diego’s longstanding antagonism toward Los Angeles was strongly reflected in the attitudes of merger opponents. The prospect of a Los Angeles-area company controlling a San Diego utility was cited by 46% of those questioned as the major reason they oppose the merger, making that factor second only to rates. Another 28% said they disapprove of the merger because they believe it would eliminate local jobs.

The obstacles faced by Edison’s public-relations campaign aimed at winning over converts to the merger plan were illustrated by a poll finding that many San Diegans distrust the company. Although Edison executives have pledged to seek a 10% rate reduction for existing SDG&E; customers within six months of approval of the merger, the poll showed that, by a 49%-33% margin, people do not take the company at its word on that promise. Similarly, only 5% of those surveyed expressed a favorable impression of Edison, compared to 24% for SDG&E; and 12% for the County Water Authority.

The poll also showed that, although the merger-versus-buyout debate has been Page 1 news for months, it is far from the top item on the public’s agenda. When asked to list the problems that they believe should receive public officials’ top priority, the utility issue ranked fourth, with only 10%, preceded by crime (45%), the homeless (17%) and sewage (12%).

Reinforcing the turnaround in public attitudes toward SDG&E;, the poll detected a longing for preservation of the status quo with the utility--an option recently described by San Diego City Councilman Ron Roberts as “getting the toothpaste back in the tube.”

Asked whether they favor keeping SDG&E; as it is, approving the merger or proceeding with a public buyout, 58% of the respondents expressed a preference for not changing SDG&E;’s ownership. Given that choice, only 14% said they view the merger as the best alternative and 12% favored a public buyout.

“What that tells the politicians is that the smartest thing would be to oppose everything,” pollster Lewis said. “The status quo may not really be an option any longer, but it’s obvious that that’s what people would like to see.”

TIMES POLL ON SDG&E; TAKEOVER Which of the following factors is the most most important reason why you approve of SDG&E;’s merger with Southern California Edison? (Up to two answers were accepted from each of the 11% of the poll respondents who expressed support for the merger.) Lower utility rates: 56% Larger company would be more efficient: 35% More reliable energy supply: 23% Better service: 14% Merger would be good for regional economy: 12% Other reasons: 6% No opinion: 3% Which of the following factors is the most important reason why you disapprove of the merger? (Up to two answers were accepted from each of the 44% of the poll respondents who said they oppose the merger.) Higher rates: 49% Los Angeles company’s control of San Diego utility: 46% Loss of local jobs: 28% More air pollution: 9% Loss of major corporate headquarters: 8% Other reasons: 15% No opinion: 1% Which of the following reasons is the most important explanation for why you approve of the San Diego County Water Authority buying SDG&E; and turning it into a publicly owned utility? (Each of the 23% who said they favor a public takeover could give one or two answers.) Lower utility rates: 43% Public officials more responsive than private utility administrators: 40% Preserve local jobs: 30% Generate income for San Diego: 23% Utility would not be run from Los Angeles: 15% Other reasons: 7% No opinion: 1% Which of the following reasons is the most important explanation for why you oppose a public takeover of SDG&E;? (Each of the 27% who said they oppose municipalization could give one or two answers.) Governments do not run utilities well: 53% Increase bureaucracy: 35% Higher utility rates: 23% Unwelcome governmental intrusion in private business: 16% Local governments would lose tax revenues: 10% Reduction in charitable donations: 6% Other reasons: 9% No opinion: 4%