Utilities Say Rivalry Would Increase : SDG&E; Defense of Merger Runs Counter to Past Claims
Competition among Western electric utilities will increase if San Diego Gas & Electric and Southern California Edison merge into the nation’s largest gas and electric utility, the two companies maintained in a massive filing made Friday with federal regulators.
In the filing with the Federal Energy Regulatory Commission, SDG&E; and Edison suggested that the merger would give competitors increased access to the limited transmission lines in California and the West. Edison also promised that utilities would be able to become partners on new transmission-line projects within the merged company’s service area.
However, critics said it will be difficult for Edison and SDG&E; to convince federal regulators that competition would be bolstered by the merger.
Counter to Past Claims
“I’ll be amazed if they can prove that,” said David Bardine, a Washington-based attorney who represents the city of San Diego in the regulatory proceedings.
The federal government now must “probe and find out” if the merger would create any “true increase” in transmission access for competitors, according to Bardine, who had not yet read the 6-inch-thick filing.
SDG&E;’s contention that the merger would increase competition runs counter to past claims by the San Diego-based utility, according to Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group.
SDG&E; in recent years has argued that Edison effectively used control of its transmission lines to help stifle competition between SDG&E; and Edison, according to documents Shames made available Friday.
Similarly, transmission access has been a thorny issue for other utilities in Southern California, as witnessed by a court battle that several municipal electric systems have been waging against Edison for 10 years.
That court action, which seeks access to Edison’s vast web of transmission lines, was lodged by a group of municipalities--including Anaheim, Riverside and Azusa--that meet customer demand for electricity by buying power from utilities in other parts of the country. The so-called “resale cities” have maintained that Edison won’t give them access to electric lines that connect with transmission systems owned by other utilities with low-cost electricity for sale.
Revenue for Edison
Edison in the past has maintained that it needed existing transmission capacity to meet its own customer demand. But, in Friday’s filing, Edison suggested that the merged companies would be efficient enough to free up impressive amounts of space on the existing transmission system.
Competing utilities would be free to buy space on Edison’s lines, a move that would generate revenue for Edison.
The existing transmission system in California is largely owned by Edison and Pacific Gas & Electric, based in Northern California. The grid connects Southern California with the Pacific Northwest, which generates excess electricity through hydropower, and the Southwest, which has excess electricity from coal-fired generating plants.
Friday’s filing suggests that Edison is seeking support from the resale cities, according to Shames. “But there’s a glaring absence in the filing--some discussion of Edison’s track record . . . which largely portrays Edison as a villain on past transmission issues,” Shames said.
Bardine questioned whether the transmission capacity promised by Edison and SDG&E; is “real or illusory.”
In a related development Friday, the state Public Utilities Commission ordered SDG&E; not to share sensitive corporate documents with Edison unless the information is “reasonably required” as part of planning for the merger.
UCAN and a San Francisco-based consumer group had complained that proprietary information being gathered by Edison would give the Rosemead-based utility an unfair competitive advantage over SDG&E; should the merger not be completed.
