Merger Would Boost Smog in L.A.--Report : Utilities: Environmental impact study completed on combining San Diego Gas & Electric and SoCal Edison. Air quality officials promise to take a hard look.

Emissions of air pollutants would increase significantly in the Los Angeles region if San Diego Gas & Electric Co. merges with Southern California Edison Corp., according to a draft environmental impact report released by the state Monday.

The report found, however, that the pollution increases in the Los Angeles area and some surrounding communities, including Ventura County, could be offset in large part by the merged utility. That could be accomplished, the report said, if the utility applied new conservation measures and used San Diego area plants when smog alerts necessitated a slowdown of power plants in Los Angeles, among other things.

The report, a yearlong analysis ordered by the state Public Utilities Commission, said these and other mitigation measures would cost about $65 million over 18 years. The two utility companies have said they will save $1.7 billion over 10 years by combining operations.

Until this week, the proposed merger, which would create the nation’s largest utility company with 4.8 million customers and is widely opposed in San Diego, had sparked little interest among Los Angeles air quality administrators. But on Monday, Bill Kelly, a spokesman for the South Coast Air Quality Management District, said his office would give the report its full attention.

“We’re going to have to look at the complete impact report and study it carefully,” he said.

Overall, the report concluded that the merger would improve air quality in the San Diego area because existing Edison power plants in Los Angeles would be used instead of older, less efficient plants in San Diego.

According to a summary of the 900-page report released by Edison, San Diego would experience an overall 5% reduction of nitrous oxide emissions and a 60% reduction in power-plant nitrous oxide emissions.

But the report found that power-plant nitrogen oxide emissions in the Los Angeles region would increase by about a third after the proposed merger. Overall, Edison said, total nitrogen oxide emissions in the Los Angeles area would increase 0.16%--1.7 tons per day above the 1,040 tons a day now emitted by all sources.

The report also said that more than 3,000 jobs could be lost in San Diego County if the merger is approved--1,505 directly and about 1,558 secondary jobs in related businesses.

But a vice president at Edison, Lewis M. Phelps, said Monday that the report’s authors erred in assuming that all job cuts would be in San Diego County. He said the company expects to reduce the work force in San Diego County by between 300 and 400 positions. Another 700 or so jobs will be eliminated in various sites in Los Angeles, Phelps said.

Phelps and Michael R. Peevey, an executive vice president at Edison, said they were pleased with the report.

“The report gives us a clean bill of health in most areas,” said Peevey, citing the report’s finding that the merger’s impact on hazardous materials disposal and water resources and fisheries is less than significant.

“This is a big day for us,” Phelps said. “We’re gratified that the report confirmed what we’ve been saying all along: this is an environmentally positive merger.”

But Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group opposing the proposed merger, said the report’s optimistic predictions are based on a faulty premise.

“It is premised on the belief that the Los Angelenos will tolerate our air pollution. That is unlikely. There are serious air pollution concerns for Los Angeles,” said Shames, who said the report would hurt the merger’s chances.

“It’s not a knockout punch, but it’s a body blow” to the utility companies, he said.

The boards of both utilities approved the merger in November, 1988, and shareholders of both assented in early 1989.

The deal must be approved by the Federal Energy Regulatory Commission and the state PUC.