State Foresees Less S.D. Smog Under Merger

San Diego’s air quality would improve if San Diego Gas & Electric Co. merged with Southern California Edison Corp., while air pollution would increase significantly in the Los Angeles region, according to a draft environmental impact report released by the state Monday.

However, the report says the pollution increases in the Los Angeles area could be largely offset if the merged utilities applied new conservation measures and used San Diego-area power plants when smog alerts necessitated a slowdown of plants in Los Angeles, among other things.

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

The report also says that the proposed merger could result in the loss of more than 3,000 jobs in San Diego County--1,505 directly and about 1,558 secondary jobs in related businesses. But an Edison spokesman challenged those numbers, saying the company plans to eliminate only 300 to 400 positions in San Diego.

People on both sides of the hotly contested merger debate found encouragement in the 900-page report. Opponents of the merger said the findings concerning lost jobs and added pollution in the Los Angeles region will make it difficult for the utilities to push forward in their quest to join forces. But spokesmen for the utilities said the report gives them an overall “clean bill of health.”

Until this week, the proposed merger, which would create the nation’s largest utility company with 4.8 million customers, had sparked little interest among Los Angeles air-quality administrators. But Monday, Bill Kelly, a spokesman for the South Coast Air Quality Management District, said his office will 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 concludes 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 report released by Edison. According to Edison’s summary, San Diego would enjoy an overall 5% reduction of nitrous oxide emissions and a 60% reduction in power plant nitrous oxide emissions.

Power plant nitrous oxide emissions in the Los Angeles basin would increase by about a third after the proposed merger. Overall, Edison said, total nitrous oxide emissions in the Los Angeles area would increase .16%, or 1.7 tons a day above the 1,040 tons now emitted by all sources.

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

Lewis M. Phelps, a vice president at Edison, agreed.

“This is a big day for us,” he 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 consumers group opposing the 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,” according to Shames, who said the report will hurt the merger’s chances.

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

Richard J. Sommerville, San Diego’s air pollution control officer, said Los Angeles’ problems will affect San Diego indirectly because studies show pollution often travels south.

“Emissions in the greater L. A. area are transported down to San Diego,” he said, noting that last year so-called transport smog was responsible for 70% of the days when San Diego exceeded federal air quality standards. “I can’t see how they can say that the air getting dirtier in the South Coast Air Basin (in Los Angeles) is somehow going to make air cleaner in San Diego.”

In regard to the potential loss of employment, Phelps said that Edison had estimated it would eliminate 1,062 jobs and relocate 443 jobs overall--not just in San Diego County, as the report says. He said the company now employs about 4,200 people in the county and expects that, after a merger, it would employ about 3,900. Another 700 or so jobs would be eliminated at various sites in Los Angeles, Phelps said.

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

The merger itself would be accomplished by a $2.4-billion stock swap under which 1.3 shares of Edison’s parent company, SCEcorp, would be exchanged for a single share of SDG&E; common stock.

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

The two utilities have spent at least $2.2 million on merger-related public relations and advertising, they disclosed in documents filed late last year with the PUC. Still, the merger has generated considerable formal opposition.