Southland Utilities Detail Merger Plan, Including Transfers

Southern California Edison’s proposed merger with San Diego Gas & Electric would save the utilities $1.7 billion during the next decade, according to documents the two utilities have filed with the state Public Utilities Commission.

SDG&E; and Edison repeated their previous assertion that only 1,000 jobs would be lost after the proposed merger that would create the nation’s largest gas and electric utility.

However, the filing suggested for the first time that an additional 1,700 employees will probably be transferred if the merger occurs. Edison Vice President Michael Peevey said Monday that it is too early to say which employees would face probable transfers.

Executives at both utilities maintained that the merger would lead to lower electric rates for the new company’s 4.8 million customers, improved service, a more reliable electric supply and reduced air pollution. “The merged companies will be a stronger, more efficient utility, with a diversified power supply and fuel mix,” according to the documents, filed late Friday.

The joint filing--an 8-inch-thick collection of documents--provided the first comprehensive analysis of how the combined company would operate. The PUC will use the complex and wide-ranging document during its upcoming review of the merger.

The filing drew immediate criticism from environmentalists, consumer groups and politicians in San Diego, who have opposed the proposed merger since it was announced Nov. 30.

The filing “seemed to ignore a lot of the concerns raised by us and other San Diegans,” said Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group. “They tried to put a nice window dressing (on the proposed merger), but there’s still nothing that makes me think that this is a good deal for San Diego residents.”

The utilities also relied heavily upon what critics in the past have labeled “celebrity witnesses.”

James S. Schlesinger, former secretary of the Department of Energy, endorsed the proposed merger as a “sensible and worthwhile step” that will “yield real benefits, especially over time.”

Emissions a Concern

The merger also won praise from Lee M. Thomas, who served as administrator of the Environmental Protection Agency during the last half of the Reagan Administration. Thomas said the proposed merger’s environmental impact seemed to be “consistent with the objectives of achieving long-term, stable improvements in air quality for Southern California.”

The merger would improve air quality in San Diego because the combined company would cut back on the use of older oil- and gas-fired electrical power plants in San Diego County, according to Thomas. The former EPA administrator also suggested that air quality in the Los Angeles area would be improved with or without a merger, largely because of tough new restrictions recently proposed by the South Coast Air Quality Management District.

Shames also scored the utilities’ promise to seek a 10% rate decrease for SDG&E;’s residential customers and a 5% rate cut for the San Diego-based utility’s commercial and agricultural customers.

“If I were in Los Angeles, I’d be protesting the proposed 5% to 10% rate decreases promised for San Diegans,” Shames said. “It means that (Edison customers) will be subsidizing SDG&E; rate cuts for a promise that they’ll get something back in the future.”

However, Larry Berg, an air quality board member, said: “Our major concern is that (a merger) is really dealing with emissions throughout Southern California. What (Edison) does in San Diego has an impact on us up here, and vice versa.” Berg is chairman of USC’s Institute of Politics and Government.

Shareholders of SDG&E; and SCEcorp, Edison’s Rosemead-based parent company, are expected to approve the proposed merger during meetings this week.

The merger must also be approved by a handful of regulatory agencies, including the state PUC and the Federal Energy Regulatory Commission. Opposition to the proposed merger has been increasing in San Diego since SDG&E;’s board of directors voted to accept SCEcorp’s $2.4-billion stock swap merger Nov. 30.