SCEcorp Chief Touts Benefits of Bigness

Times Staff Writer

Howard Allen, SCEcorp chairman, had less than one hour to persuade more than a hundred San Diego business leaders to subscribe to his view: Bigger is better.

Allen, as part of SCEcorp’s continued effort to woo the public, spoke to the San Diego Rotary Club on Thursday afternoon and repeated his previously stated assurances that a merger between SCEcorp’s subsidiary, SoCal Edison, and SDG&E; would benefit San Diegans. The benefits, he said, would accrue mainly because the merger would make SDG&E-Edison; the country’s largest investor-owned utility company.

‘Small Size a Drawback’

“The main drawback of a home-town utility is its small size, with less diversity in power sources, less financial strength, less opportunity for top professionals and less opportunity to achieve efficiencies which provide lower costs to customers,” Allen said. The merger, on the other hand, would boost SDG&E; by lending it Edison’s greater financial strength and would lead to improved service and lower rates, he argued.


Allen sharply rebutted a recent county report concluding that the merger could lead to drastically increased air pollution in San Diego.

“What has been reported in the papers is not true,” he said, adding that the existing San Diego power plants would be operated in a manner that would produce fewer pollutants than without the merger.

Air District Report

Central to the county Air Pollution Control District’s report, released last week, was the assumption that Edison would take advantage of the fact that 62% of SDG&E;'s generating capacity is unused. The report theorized that Edison, under increasing regulatory pressure to reduce emissions in the Los Angeles area, would shift the majority of their power-generation operations to the south and run the San Diego facilities at 100% capacity, then transfer power back to Los Angeles.


Large advertisements by Edison were placed in local newspapers Thursday in an attempt to mitigate any public-relations damage from the APCD report. The advertisement read, in part: “The Edison-SDG&E; merger will result in fewer power-plant emissions and better air quality from power plants in San Diego.”

The APCD’s conclusion that the merger would cause worse air quality is wrong, according to the ad. It would be in the utility’s best interest to use the power plants owned by SDG&E; the least because they are older and more expensive to run, the ad stated.

Allen also told the Rotarians that, in a merger, Edison would be able to obtain non-polluting power from sources outside the San Diego area, including hydroelectric and nuclear.

Allen quickly dismissed the possibility that the city of San Diego and the County Water Authority might move to municipalize the utility as “a poor alternative.”

‘It Won’t Work’

“In our opinion, it won’t work,” he said, pointing out the Water Authority’s lack of experience running a utility company.

In response to a question about SDG&E;'s lawsuit to prevent the Water Authority from spending money on a feasibility study, Allen said, “I don’t think we ourselves have done anything to block you. . . . but I can’t blame (SDG&E;) for doing everything they can to protect their interests.”

A Superior Court judge will decide Monday whether to grant SDG&E;'s request for an injunction to prevent the Water Authority from undertaking the proposed feasibility study.


County supervisors are scheduled to address the APCD report at their Tuesday meeting but may not have any legal authority to interfere with the merger, the county counsel’s office said.