Impact Study Needed On Utility Merger

One of the issues that the California Public Utilities Commission will look at in its evaluation of the proposed merger between San Diego Gas & Electric and Southern California Edison is the environmental impact.

Because San Diegans have raised sufficient questions, the PUC has asked SDG&E; and Edison to assess the environmental effects of the merger as part of their applications. From there, the PUC will decide whether a full-scale, independent environmental impact study is needed.

Two recent actions by Southern California air pollution officials underscore the need for a full environmental impact study.

The first was a report by the San Diego County air pollution control officer, which calculated estimates of the additional pollution that would be generated--under five scenarios--if Edison were to use SDG&E; plants to produce energy for Edison customers. Some of the scenarios were extreme and unlikely to come to pass. And there was no assessment of the likelihood of the scenarios, which are dependent on such hard-to-predict economic factors as the price of oil and natural gas and the availability of power elsewhere.

But the bottom line is, if Edison generates power in San Diego for Los Angeles-area customers, it will increase air pollution here, something San Diego can ill afford, since last year it exceeded federal standards for ozone on 45 days and there were two smog alerts.

Evaluating the environmental impact of the merger is complicated by the recent approval of a much-needed air quality plan for Los Angeles, Orange, Riverside and San Bernardino counties. Edison fought tooth and nail against the plan, which aims to put the Los Angeles Basin in compliance with federal standards within 20 years.

Cleaning up the nation’s dirtiest air will mean a wide range of changes in living and commuting habits. Nor will it be business as usual for business.

Edison will be forced to find ways to produce fewer pollutants in the Los Angeles Basin. One way is to retrofit its plants with additional pollution control devices--a costly option. Another is to reduce or eliminate its use of fuel oil. It may also have to produce or buy more power generated outside the Los Angeles Basin.

That’s where San Diego could come into play. Since there are fewer days when the air is unhealthy here, Edison could turn to San Diego plants to produce some of the energy that Edison would not be able to generate in the Los Angeles Basin. It could also use San Diego plants to replace the oil-fueled power it now produces in the Los Angeles area.

How often this would make economic sense for Edison is a big question. Last summer, for example, during a smog alert in Los Angeles which coincided with a natural-gas shortage, the PUC allowed Edison and other Los Angeles utilities to divert cleaner-burning natural gas intended for SDG&E; and other utilities. This forced SDG&E; to burn more oil.

SDG&E; is being reimbursed with additional deliveries of natural gas now, but would that have happened if SDG&E; had not raised concerns about the loss of control of its supplies? Would it have happened if SDG&E; were owned by Edison? These are the kinds of questions the PUC needs to address. Edison has said that it would protect San Diego’s environment if the merger is approved. But Edison’s scare tactics and exaggerated estimates of the cost of the plan to clean up Los Angeles’ air do not inspire confidence in that commitment.

What is called for is a dispassionate and thorough study of the environmental impacts of Edison ownership of SDG&E;, conducted by the PUC. Preparing an environmental impact report may slow the approval process--and that presents difficulties for the two utilities--but the questions are complex enough and the stakes are high enough to warrant it.