Atty. Gen. Issues Anti-Merger Opinion

San Diego Gas & Electric Co.’s proposed merger with Southern California Edison Corp. would damage competition at the wholesale and retail levels and boost electric rates for utility customers throughout Southern California, according to an opinion released Tuesday by state Atty. Gen. John Van de Kamp.

Van de Kamp earlier this year announced that his office would oppose the merger on antitrust and environmental grounds during the state Public Utilities Commission’s ongoing merger review. The 65-page opinion is in response to a new state law that requires the attorney general to issue an advisory opinion on proposed utility mergers. The law prohibits mergers that “adversely affect competition.”

Utility officials had not yet read the opinion, Edison spokesman Lewis Phelps said Tuesday. However, “from what we’ve heard, it seems to include the same points that the attorney general articulated earlier” when he formally entered the PUC’s review, Phelps said.

“Edison strongly disagrees with the attorney general’s interpretation of the facts,” Phelps said. “To the contrary, this merger will make (an additional) 400 megawatts of electric transmission capacity available.”

San Diego Mayor Maureen O’Connor on Tuesday called Van de Kamp’s opposition one more reason why the merger should be rejected.

“The city of San Diego should be very pleased with the attorney general’s opposition,” she said. “Everyone who has looked at (the merger), other than SDG&E; and Edison, says it’s a bad deal.”

O’Connor dismissed suggestions that Van de Kamp is opposing the merger in an attempt to win votes in his bid to become state governor.

“If it’s politics, it’s good politics,” she said. The mayor argued that Van de Kamp, the only candidate for governor to oppose the merger, has made Edison “an enemy for life.”

The opinion Van de Kamp issued is important because it carries more legal weight than testimony offered by other merger opponents, said Michael Shames, executive director of the Utility Consumers Action Network, a San Diego-based consumer group.

The PUC, which is gathering testimony from proponents and opponents of the merger, “might disagree with UCAN, the city of San Diego or someone else who opposes the merger,” Shames said. “But by law, they have to respond to the attorney general’s opinion.”

According to Van de Kamp, the merger would bolster Edison’s “monopoly control” over transmission lines leading in and out of Southern California. For two decades, a number of publicly owned municipal utilities in the region have been battling Edison for space on those lines.

Those municipally owned systems in cities such as Banning, Colton, Azusa and Anaheim have been described as “islands” in Edison’s service territory. They generate no electricity of their own, and instead purchase power that is imported along Edison’s lines.

Van de Kamp said in his opinion that SDG&E; “has emerged in recent years as an increasingly aggressive broker of wholesale power, using its own transmission lines to make power available” to those municipally owned systems. Elimination of SDG&E; through the proposed merger would “injure competition,” he said.