SDG&E; Vows to Battle Bill Smoothing Path for a Municipal Takeover

San Diego Gas & Electric Co. officials vowed Friday to strenuously oppose the latest legislative effort to make it easier for the government to take over the investor-owned utility.

Karen Hutchens, director of governmental affairs for the company, said the firm will try to defeat a bill by Sen. Larry Stirling (R-San Diego) in a Senate committee next week.

The bill was recently amended so that it would allow the county to call for an election, at which a majority of voters could approve creation of a seven-member County Utility District that could sell bonds and purchase the utility. The bonds would be repaid by revenue from utility users.

A Different Process

Under existing law, the formation of such a district would first require each of the county’s city councils to vote to place the issue on the ballot. Then two-thirds of the voters in each participating city would have to approve the measure before the public utility could be formed.

Stirling’s bill would also allow the San Diego County Board of Supervisors to appoint the original seven members of the public utility’s board of directors. These members would then be phased out and replaced by elected members during a four-year period.

Existing law requires that members of a public utility be elected at the same time the utility is formed.

Hutchens said Stirling’s bill was no more than an indirect attack by San Diego politicians on SDG&E;’s proposed merger with Los Angeles County-based Southern California Edison Co.

‘Why Is This Needed?’

“Our question is, ‘Why is this needed?’ ” Hutchens said. “What makes San Diego so different? We already have existing laws on the books which provide for the formation of municipal utility districts. Why do we have to go to another method?”

Hutchens said recent opinion polls show that most county residents oppose a government takeover of San Diego Gas & Electric.

“The people of San Diego County thought that the municipal takeover issue was dead and buried,” she said. “The merger is the real issue. Yet we have legislation like this still coming up in Sacramento.”

Deleting the two-thirds vote requirement, Hutchens said, “really takes the voters out of the process.”

In its earlier form, Stirling’s bill would have allowed the San Diego County Water Authority to go into the energy business and purchase SDG&E.; Stirling had all but abandoned that measure amid signs that legislators would not support it.

Stirling, in fact, said last month that the strategy of proposing a public takeover of the utility was a “mistake” that had been used by SDG&E; as a “red herring” to divert attention from the merger issue.

In that interview, Stirling said: “What I’ve done is make a tactical mistake by raising the issue of municipalization so heavily. It’s given the Edison people a perfect straw man to fight against.”

On Friday, however, Stirling said that, despite the political strategy, he continues to believe that a municipal utility is the best alternative for San Diegans.

“I believe the municipal utility will provide the best service at the cheapest cost,” Stirling said. “I think it’s important that the voters get their best chance at evaluating that and acting on it if they so choose.”

Ben Clay, a lobbyist for the County Water Authority, said the bill was changed to overcome the objections of state legislators who opposed the measure in its original form.

Clay said the bill’s provision for a countywide majority vote, rather than a city-by-city and two-thirds majority, would prevent the establishment of a “patchwork quilt” utility system in which some cities were served by the public utility and others by an investor-owned company.

“We think it makes more sense to have them all in or have them all out,” Clay said.

Stirling’s bill is scheduled to be heard Tuesday in the Senate Agriculture and Water Resources Committee. It may also be referred to the Energy and Public Utilities Committee, which last month killed another Stirling bill that would have provided for an advisory vote of San Diegans before the SDG&E-Edison; merger could go forward.