Assembly Office Is Studying SDG&E; Merger

The state Assembly’s Office of Research is conducting an independent study to estimate whether utility rates would climb or fall under four alternative scenarios for the future of San Diego Gas & Electric Co., Assemblywoman Lucy Killea said Friday.

Killea said she requested the study so that she and other legislators will have an unbiased analysis of the effect each of the options might have on ratepayers. She said the request is unrelated to the recent court ruling barring the San Diego County Water Authority from conducting a similar study of its own.

The four scenarios are:

- Continued local ownership of SDG&E.;

- The proposed merger of SDG&E; with Southern California Edison.

- Acquisition of SDG&E; by an existing public agency.

- Creation of a new municipal utility district.

Although Killea introduced an Assembly resolution Wednesday formally requiring that the study be performed, work on the inquiry actually began about two weeks ago, according to Clyde MacDonald, a consultant in the Office of Research who is overseeing the project.

MacDonald said he is working on the research full time with the help of two part-time assistants. He said the group hopes to have some preliminary information by March 10, when the Senate and Assembly utilities committees are scheduled to meet in Los Angeles to discuss the proposed merger and the efforts to block it.

“The Public Utilities Commission is going to do a very exhaustive study, and the utilities themselves will present their own view,” MacDonald said. “The assemblywoman just wanted a straight-up analysis with no bias whatsoever. That’s what we’re doing.”

MacDonald said the researchers will attempt to show how rates would be affected for the next 20 years under each alternative.

“Whether we can do that, I don’t know yet,” he said. “You can make short-term projections on rates because we know what the costs are. But it gets fuzzy as you go out.”

Welcomed by Both Sides

The Assembly study was welcomed by SDG&E; and the Water Authority, which have been at odds since the water board began considering taking over the investor-owned utility as a way of blocking the proposed merger with Rosemead-based Edison.

A San Diego Superior Court judge Tuesday temporarily blocked the Water Authority from studying a possible takeover attempt, saying the agency lacks the legal power to perform such a study.

Ben Clay, a lobbyist for the authority, said the board would welcome an independent look at the issue.

“Anything that brings facts onto the table we support,” he said.

SDG&E; Vice President Dick Manning said he doesn’t object to the study.

“The Legislature has the authority to investigate and pass laws under the Constitution on a much broader range than the Water Authority,” Manning said. “I don’t have any problem with them carrying out that responsibility.”