City Wants Inquiry Into SDG&E; Merger Switch

Times Staff Writer

The city of San Diego on Wednesday demanded that federal regulators subpoena two former San Diego Gas & Electric board members to help determine if Southern California Edison used “improper financial inducements” to coerce SDG&E;'s board members into approving the proposed merger between the two utilities.

The city Wednesday asked the Federal Energy Regulatory Commission to subpoena former SDG&E; board members Charles (Red) Scott and O. Morris Sievert--both of whom resigned after the SDG&E; board vote.

The city hopes to uncover evidence that SDG&E; board members who first opposed Edison’s merger proposal changed their votes because of financial inducements and unidentified “threats.”

‘Abrupt’ Reversal


The filing Wednesday was prompted by the “abrupt and unexplained” reversal by SDG&E; board members, who last summer rebuffed Edison’s first merger offer. SDG&E;'s board on Nov. 30 accepted a sweetened stock-swap merger offer from Edison.

Edison spokesman Lewis Phelps denied any improprieties in the board vote. “The (negotiations) leading to the merger vote were conducted at an appropriate arm’s-length distance,” Phelps said.

SDG&E; had not seen the filing on Wednesday, according to SDG&E; spokesman Maurice Luque. Attorneys representing Scott and Sievert were not available for comment on Wednesday.

The city also will petition the state Public Utilities Commission for authority to subpoena Scott and Sievert, San Diego City Atty. John Witt said Wednesday.


“We’re interested in knowing what the directors were told prior to their voting,” said Witt.

Decision ‘Puzzling’

David Bardine, a Washington, D.C.-based lawyer who represents the city in FERC proceedings, was not available for comment on Wednesday. However, Witt said that Bardine’s firm “has a pretty good idea” of what Edison told SDG&E;'s board members before the Nov. 30 vote.

The city “finds puzzling the decision of most of SDG&E;'s directors to recommend (the) merger--after having previously opposed the merger proposal,” according to the Wednesday filing.


The filing also suggested that Edison might have “exercised improper economic leverage against SDG&E; by denying access to transmission capacity” to parts of the country with excess electricity.