Edison’s Chairman Says He May Retire Next Year : Utilities: If a proposed $2.4-billion merger with San Diego Gas & Electric is still pending when Howard Allen turns 65 in October, the board may want him to stay on.

Howard P. Allen, the outspoken and colorful chairman of Southern California Edison Co. and its holding company, said he might leave once he reaches the utility’s retirement age of 65 next October, but he added that he will wait until August to decide.

In an interview, Allen also confirmed that he met earlier this month with each member of the state Public Utilities Commission to say he was thinking of retiring--even though the company’s controversial $2.4-billion proposed merger with San Diego Gas & Electric Co. will probably remain unresolved at the time of his departure.

“I felt that I should call on each commissioner and tell them that I would be at normal retirement age in October and that I would be making a decision in August on this,” Allen said in the interview Thursday.

Opponents of the merger suggested that Allen might want to remove himself from public scrutiny since his gruff style has been something of a lightning rod for critics in San Diego.

Other observers said they doubt that Edison’s board will let Allen--the architect of Edison’s aggressive diversification--go easily, since he is also the moving force behind the merger.

Asked whether he wants to retire, the 36-year Edison veteran sidestepped the question. “The board could conclude that it would be better if I stay on a year and wind this thing up in the interests of consumers and an orderly transition,” he said. But he added, “I believe in normal retirement. A lot of mischief can be played by well-intentioned, good people who stay on too long.”

Likely candidates to succeed Allen include SCEcorp Executive Vice Presidents John E. Bryson and Michael R. Peevey.

“It’s difficult to tell how things will sort out because (Allen) exerted such a strong hand in the company for a number of years,” said Bud Moeller, a utilities analyst with Booz-Allen & Hamilton, an energy-consulting firm in San Francisco.

Patrick Power, a former PUC administrative law judge and a lawyer specializing in utilities issues, said: “He’s a hard act to follow. . . . But I don’t see (Edison) losing direction. . . . If they stick to their business, they’ll do just fine.”

Allen would leave behind an Edison career that climaxed with the company’s aggressive moves into non-regulated businesses that helped it earn record profits in an increasingly competitive climate.

Allen put together the plan to merge Edison with SDG&E;, a deal that would create the nation’s largest supplier of electricity if it passes the lengthy federal and state regulatory process now under way.

The proposed merger, though it has been approved by the San Diego utility’s board, has drawn heated opposition from local San Diego groups contending that a merger would mean less control, higher rates, fewer jobs and more pollution in their city. Edison denies the charges. Some critics have argued that Allen himself has been insensitive to the concerns of San Diegans--a charge that Allen disputes.

Would Allen’s retirement mollify the merger’s opponents?

“I think there are some people here who would be glad to see him go, but I don’t think it would lessen the opposition,” said Bob Hudson, executive director of the broad-based Coalition for Local Control, a San Diego group opposing the merger. “It’s not a personality issue; it’s about air pollution, rates and local control.”

Allen, a native of Upland and a former Stanford Law School professor, joined Edison in 1954 as a lobbyist in Sacramento. He has been president of the company since 1980 and chairman and chief executive since 1984. He holds the same three titles with the parent company, SCEcorp.

Under Allen’s stewardship, Edison has managed to steer away from investments in troubled nuclear projects or savings and loans that have proven disastrous for other utility companies.

Faced with federal and state regulations that require Edison to buy power from independent producers at rates set by regulators, Allen oversaw the creation of a power producer, Mission Energy, a separate subsidiary of SCEcorp, to sell power to Edison.

Allen has been a vocal opponent of such regulations.

Mission Energy now operates 18 energy projects, including cogeneration joint ventures with Texaco Inc. and Atlantic Richfield Co. SCEcorp also diversified into such non-regulated businesses as finance, real estate and engineering.

Mission Energy and the other non-regulated businesses now account for about 12% of SCEcorp’s earnings, and Allen has said he foresees a time when the group’s businesses might overshadow the utility.