Report Sees Utility Merger as Threat to Air

The planned merger of San Diego Gas & Electric and Southern California Edison could cause substantially increased air pollution in the San Diego area if Edison opts to generate power here for the Los Angeles-area market, according to a county report unveiled Thursday.

The study immediately heightened the controversy surrounding the proposed merger, which has been an explosive issue in San Diego since it surfaced late last year. The findings seemed likely to galvanize environmental opposition to the consolidation plan, now pending before state and federal regulators.

‘Significant Increases’

The new report, conducted by the county’s air pollution control officer, found that the merger could result in “significant increases” in emissions in the San Diego area, possibly jeopardizing the region’s ability to meet federal and state standards for certain pollutants.

The reason, the study concluded, is that Edison, under regulatory pressure to reduce emissions in the heavily polluted Los Angeles area, may opt to increase power generation in the San Diego region--where much of the SDG&E; capacity is unused--and divert the power to the north.

Spokesmen for Edison and SDG&E; immediately denied that the merger would exacerbate pollution in San Diego, where smog is a serious problem, albeit not as drastic as in the Los Angeles area. Edison has no grand plan to shift power generation to the south, said the officials of the two utilities, who stressed that they had not yet had a chance to review the county report thoroughly.

“We’ve made a commitment that we’re going to help improve the San Diego air quality, and, under a merged company, the emissions would be the same or lower,” said David Barron, an Edison spokesman, speaking from the utility headquarters in the San Gabriel Valley.

His statement echoed declarations that have appeared in recent Edison advertisements in newspapers in the San Diego area, ads designed to defuse opposition as the battle of the merger intensifies. “We pledge to help improve San Diego’s air quality,” the copy said.

Nonetheless, the report appears to provide ammunition to those opposed to the move.

“San Diego should not have its air quality sacrificed for someplace else’s cleanup work,” said San Diego County Supervisor Susan Golding, speaking at a news conference called to release the study. “I know my colleagues and I will do what we can to ensure that San Diego doesn’t end up with Edison’s pollution problems.”

Intense Opposition

In San Diego, where many residents and lawmakers cast a wary eye toward their bustling northern neighbor, there has been intense opposition to the prospect of a Los Angeles-area utility gaining control of SDG&E;, which has served the area for more than 100 years and remains one of the area’s largest employers, with about 4,400 employees. Among other things, concern has been voiced about the loss of a San Diego corporate headquarters, disruptions in service and the planned reductions of 1,000 positions in a post-merger utility, which officials say will be accomplished largely through attrition and not layoffs.

Now, the environmental issue will probably be at the forefront of those concerns.

“You don’t need a degree in chemistry to know that this utility merger could result in air that we can see--air that we can smell--air that threatens our health and our quality of life,” said Golding, who is chairwoman of the county’s air pollution control district board.

Added Supervisor Brian Bilbray: “There is a possibility of a major problem here, and that problem needs to be investigated throughly before the consolidation is allowed to move forward.”

The county officials stopped short of expressing outright opposition to the merger, saying they need more information. However, even if the supervisors do come out against the merger, their legal recourse seems limited. The county is not in a legal position to block the merger, said Tony Albers, chief deputy county counsel.

The county environmental report proposed that the supervisors request that both the California Public Utilities Commission and the Federal Energy Regulatory Commission, two agencies that must approve the merger, conduct studies to document the environmental impact of the move. County supervisors are likely to request the studies formally at a meeting scheduled for March 28, officials said.

However, a spokeswoman for the state utilities commission said such a review is already planned. The state and federal regulatory bodies are expected to consider the proposal later this year. Utility officials have voiced the hope that the merger will be in place by early next year.

The county focused on the potential impact if the merged utility were to operate all SDG&E; facilities at full capacity using fuel oil. Now, 62% of SDG&E;’s generating capacity is unused but would be available for more complete use by Edison. SDG&E; now burns mostly natural gas, which is cleaner than oil.

If all the plants were fired up to 100% capacity using fuel oil, the study concluded, the result would be substantial annual increases in San Diego-area emissions, including: 9,326 tons more of particulate matter; 28,349 extra tons of oxides and sulfurs; 17,475 tons of oxides and nitrogen; 1,800 tons of carbon monoxide and 381 tons of reactive organic gasses.

Such increases, the report stated, might hamper San Diego’s ability to meet federal standards for nitrogen dioxide and ozone pollution, as well as more stringent state standards for ozone and fine particulate matter. The additional pollutants would also place a greater burden on industry and other polluters to meet with state-mandated, area-wide clean air reductions.

David Barron, the Edison spokesman, called the projections a “worst-case scenario.” He denied that there is any plan to fire up all of the SDG&E; facilities at full capacity using oil.

Ed Guiles, director of SDG&E;’s merger transition team, said it is “not realistic” to assume that all of SDG&E;’s now-unused capacity will be put into service using oil--the central premise of the county study. “We feel strongly that air quality is a major concern and must be addressed,” Guiles said.