Utility Merger Case Moved Out of County

Superior Court Judge James Millican on Thursday granted Southern California Edison’s request to move out of San Diego County a trial that will decide whether the city can stop the utility from merging with San Diego Gas & Electric.

Millican didn’t select a site for the trial, but attorneys in the case suggested he would move it to San Francisco or Sacramento.

SDG&E; supported the request to move the trial to a place “where people perhaps don’t have preconceived notions” about the merger’s promised benefits, said Mary Wood, SDG&E; assistant general counsel, on Friday.

The trial will determine if the city of San Diego has the legal right to stop Edison from completing its proposed $2.5-billion stock-swap merger with SDG&E.; The city argues that it can stop the merger by refusing to transfer normally routine franchise agreements to Edison from SDG&E.; The utilities maintain that San Diego has no right to withhold the franchise agreements.

SDG&E; and Edison “simply wanted this trial out of town,” Deputy City Atty. Bill Pettingill said Friday. “And we’re in limbo until it gets assigned to some other jurisdiction.”

Wood maintained that the utilities are simply using a state law that transfers court cases to neutral locations when “the city brings the action against a company that doesn’t do business” in the local county.

“The law practically makes the move mandatory,” Edison spokesman Lew Phelps said Friday. “We thought it was the best way to ensure that there would not be even an appearance of it not being a fair trial.”

But Pettingill argued that Edison and SDG&E; are misusing the law to “make this trial as complicated and drawn out as possible” by prohibiting the city from learning what role it will play in the franchise agreement transfer.

“Edison, as is its style, will try to make sure that a judge never sees the end of this case until at least 1995,” said Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group. The company doesn’t want state regulators to look at a negative court decision, if one should come down, he said.

Shames and Pettingill believe the utilities are using the threat of a lengthy delay to force the city to drop its suit. The utilities have argued that the city should be held financially responsible to utility shareholders if it turns out that the city stalled or stopped the merger for no good reason.

“Edison could put the city in a real tough position” by delaying the trial, Shames said.