SDG&E; Merger Opponents File Ad Complaints

Local opponents of the proposed merger between San Diego Gas & Electric and Southern California Edison accused the companies of deception in their $1.5-million advertising campaign supporting the merger.

Seeking to derail the advertising campaign, the Utility Consumer Action Network and the Coalition for Local Control filed complaints Wednesday with the state attorney general, the district attorney and the city attorney.

The letters ask officials to seek civil and criminal penalties against the utilities, as well as a court injunction halting the “despicably false and misleading” radio, TV and newspaper ads.

The future of the controversial merger proposal, which would create the largest privately owned utility in the nation, is in the hands of state and federal regulators. But opponents say the ads could affect public comment to the Federal Energy Regulatory Commission, as well as state Public Utilities Commission proceedings.

“Joe Isuzu would be a little embarrassed to repeat (the utility commercials) on the air,” CLC Executive Director Bob Hudson said at a news conference Wednesday.

‘Would Clearly Face Opposition’

“If a used-car dealer made the kind of blanket, unsupported claims found in these recent SDG&E;/Edison ads, they would clearly face prosecution,” CLC attorney Dan Stanford said in a press release.

Merger opponents object to the commercials that promise residential customers annual savings of $50. UCAN Executive Director Michael Shames said the annual savings for a typical residential customer would amount to $6 annually.

Shames and Hudson said the ads also fail to state that annual savings are guaranteed by the utility shareholders only until 1993. The ads mention the $50 annual savings, then refer to a total cost reduction of $1.7 billion through the year 2000.

SDG&E; Chairman Thomas Page is apparently among those confused by the flurry of numbers. In a June 15 interview with radio station KSDO, Page maintained that residents would save $50 annually for 11 years. When the interviewer again asked if that was true, Page replied, “Well, I hope it is,” according to a program transcript supplied by merger opponents.

Page subsequently issued a retraction that aired on KSDO, said SDG&E; spokesman David S. Smith.

Utility executives denied that their ads are deceptive and said the campaign is designed to educate consumers about the details of the merger.

“Our Public Utilities Commission filing was 8 inches thick,” said Ed Guiles, SDG&E; director of merger transition. “We are trying to take a complex subject and distill it into English so people can understand.”

The complaints “say to me that these ads have been extremely effective,” Smith said.

‘Obvious Grandstanding’

SCE spokeswoman Diane Wittenberg called the protests “groundless” and “obvious grandstanding.”

San Diego City Atty. John Witt said he referred the utility advertising issue to the district attorney’s office for possible action last month.

“Given our participation in the regulatory proceedings, it would not have been appropriate for this office to handle the case,” he said. Witt called the advertisements “outrageous.”

Acting on Witt’s request, the fraud unit of the district attorney’s office asked SCE to back up the assertions it made in a Feb. 28 newspaper ad, according to office spokesman Stephen Casey. The ad quoted “independent experts” in arguing that the merger would cut energy costs, he said.

Edison refused to provide the information because the ads amounted to corporate free speech on a public issue, Wittenberg said.

‘An Unusual Complaint’

Casey said no decision has been made on further action in the case. He was not immediately aware of the latest UCAN/CLC filing.

The state attorney general’s office usually handles complaints by defrauded consumers, office spokesman Alan Ashby said. “It’s an unusual complaint,” he said of the merger opponents’ filing.

But CLC attorney Stanford said there is no need to show a specific victim of the ad campaign, only an attempt to mislead the public.

The ad campaign, paid for exclusively by utility shareholders, has already cost $1 million. Smith said another $500,000 has been earmarked for advertising through the end of regulatory hearings.