2 Utility-Merger Bills Advance, but Measure Requiring a Vote Loses

A state Senate committee Tuesday rejected legislation that would have required the California Public Utilities Commission to weigh the results of a proposed advisory vote of ratepayers in Orange and San Diego counties before acting on the proposed merger of San Diego Gas & Electric and Southern California Edison Co.

At the same time, the committee approved two other measures meant to ensure that neither ratepayers nor the environment are harmed by the merger, which, if approved by the PUC, would create the largest U.S. electric utility.

Sen. Larry Stirling (R-San Diego), who introduced the advisory-vote measure, blamed the considerable clout that Edison and San Diego Gas & Electric wield in the Legislature for his bill’s defeat.

Edison Takeover of SDG&E;

Edison, which serves most of Orange County, is trying to take over SDG&E;, which delivers electricity to some parts of southern Orange County. San Diego officials have objected to the proposed merger since it was announced, arguing that the new company would increase rates for SDG&E; customers and foul San Diego County’s air by producing power there for use in Los Angeles.

“These are non-competitive monopolies,” Stirling said of the utilities, which annually spend hundreds of thousands of dollars lobbying the Legislature and the PUC. “They make their money not by providing a competitively priced product, but by manipulating the government. I think you’ve seen a strong indication today that they are very good at it.”

Stirling said he hoped that Orange and San Diego counties would still call for votes on the issue, even if the PUC would not be required to consider the result.

He also proposed that all ratepayers write the words No Merger on the outside of their envelopes before mailing monthly payments to SDG&E.;

“Elected officials in Sacramento are not able to deliver the votes to do anything about Edison through the legislative process,” he said. “So it’s up to every San Diegan to stand up and be counted.”

Stirling’s bill, as it was introduced, would have given voters in SDG&E;’s service area veto power over the merger. But the lawmaker, in the face of the utility opposition and a legislative counsel opinion suggesting that the measure would be unconstitutional, amended the bill to allow only an advisory vote, which the PUC would have had to consider.

Edison and SDG&E; still argued against the measure, contending that it was an unnecessary intrusion into the PUC’s regulation.

‘Just Confuse the Issue’

“The bill would just confuse the issue,” said Mary Wood, assistant general counsel for SDG&E.; “Present law gives (ratepayers) the protection that they need.”

One of the other bills, by Sen. Herschel Rosenthal (D-Los Angeles) established 10 standards for the PUC to use when weighing a proposed merger. Four of the 10 would require that the merger is a benefit to ratepayers, is “fair and reasonable” to employees, is fair to stockholders, and does not “adversely affect” competition. The other six--which involve utility service, management and the local economies--would have to be met “on balance” by the commission.