Van de Kamp Opposes Edison, SDG&E; Merger : Utilities: The attorney general says he will fight the proposal at regulatory hearings. He calls any court challenge ‘premature.’

State Atty. Gen. John K. Van de Kamp said Wednesday he would oppose Southern California Edison’s proposal to create the nation’s largest electric utility by merging with San Diego Gas & Electric because it violates antitrust laws and would damage air quality in Los Angeles.

During press conferences in San Diego and Los Angeles, Van de Kamp described the proposed $2.5-billion stock-swap merger as “not in the public interest. . . . From what I’ve seen thus far, this corporate marriage appears to be a bad deal for everyone except (Edison).”

Van de Kamp, who questioned whether the merger would generate lower rates for existing Edison customers, also expressed doubts that state regulators would allow Edison to fulfill a pledge to cut electric rates in San Diego and southern Orange counties by 10% after the merger is completed.

Van de Kamp will contest the merger during regulatory reviews under way at the state Public Utilities Commission and the Federal Energy Regulatory Commission. However, Van de Kamp said a court challenge would be “premature” because state and federal regulators have not yet completed their merger reviews.

The PUC, which begins public hearings in April, hopes to deliver a ruling early in 1991. Federal regulators, who begin merger-related hearings Monday in Washington, expect to complete their review by year’s end.

Edison Vice President Louis Phelps maintained Wednesday that Van de Kamp’s charges were “100% wrong.”

“The merger will benefit consumers by providing $1.7 million in lower rates and improved service,” Phelps said in a prepared statement. The merger would “result in cleaner air . . . (and) economic benefits to all of Southern California, . . . and it does not result in adverse competitive impacts,” Phelps said.

Van de Kamp denied Wednesday that his opposition to the merger is linked to his bid to be the Democratic gubernatorial candidate in November. He maintained that his decision to oppose the merger was driven “by the evidence, which stands for itself.”

The merger, which Edison proposed in August, 1988, has generated growing controversy in San Diego, where Mayor Maureen O’Connor has described it as one of the most important issues ever faced by the city. Opposition revolves largely around the fear that San Diego would become one of the largest cities in the country without its own, locally controlled utilities.

Van de Kamp acknowledged that “the people of Los Angeles are less interested in this merger than the people of San Diego (because) it touches them less directly, . . . (but) there are certainly interests way beyond San Diego that are affected by this.”

Van de Kamp charged that the merger could cause a dramatic increase in air pollution in the Los Angeles air basin because Edison intends to use its excess electric plants to generate power for use in San Diego. Edison has maintained that air quality will not suffer because it is fitting its plants with state-of-the-art pollution controls.

Spokesmen for smaller, municipal utilities, which operate in areas not served by Edison, welcomed Van de Kamp’s decision to oppose the merger.

“We’re pleased that the attorney general has recognized the very real concern of the municipal utilities regarding transmission access if a merger takes place,” said Jerry Jordan, executive director of the California Municipal Utilities Assn.

Van de Kamp supported the municipal utilities’ contention that the proposed merger would cause antitrust problems because Edison would extend its already impressive web of transmission lines leading in and out of Southern California.

Edison in the past has been sued by publicly owned utilities--including municipal systems owned by Anaheim, Azusa and Riverside--for not granting wider access to its transmission lines. Most of Southern California’s municipal utilities meet customer demand by using Edison’s transmission lines to import electric power generated by out-of-state utilities.

A merger with SDG&E; would give Edison “near monopoly control of bulk power production and transmission into and out of the entire Southern California region,” Van de Kamp said. “History teaches us that, over time, such power is almost always used to enrich those who wield it at the expense of those who do not.”