Federal Report Calls for OK of Utility Merger

Most of the objections raised against Southern California Edison’s proposed merger with San Diego Gas & Electric “are without merit,” according to a report issued late Friday by the Federal Energy Regulatory Commission staff.

The FERC staff report concludes that the merger “is consistent with the public interest and should be approved,” in part because it would generate “net savings” that could be passed along to customers.

Although Edison and SDG&E; spokesmen on Monday described the report as further evidence that combining the utility companies would benefit Southern Californians, merger opponents in San Diego downplayed the report’s conclusions.

An FERC law judge will use the report--and thousands of pages of testimony supplied by both sides in the controversy--when he makes a recommendation to the federal commission on the proposed $2.5-million stock swap merger. The full com mission will rule on the merger by early next year.

“I don’t think that it lends much more weight to the (pro-merger) case,” said David Bardine, a Washington attorney representing the city of San Diego in its fight against the merger. “The commission will decide the case based on all the evidence . . . and the staff has all along been very supportive of the (utilities).”

“The law judge has made it very clear on the record that what we think or (the staff) thinks is not important,” Bardine said. The law judge has said he will weigh the facts for himself and make an independent judgment, Bardine said.

Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group also opposing the merger, said the report was no surprise.

The staff “telegraphed their position” with earlier filings, he said. “It’s certainly a disappointment, but, when I went through it, I didn’t find much of substance.”

Shames questioned the commission staff’s decision to give relatively little consideration to residential electric rates, should the merger occur.

“I think staff was looking at the pine needles and missing the forest,” Bardine said.

In a development related to the merger, Edison has reached an agreement with the air pollution control agency in San Bernardino County, Edison spokesman Lew Phelps said Monday. The agreement would control the amount of pollution that would be emitted by Edison’s electric generating plant in that county.

The Ventura County Board of Supervisors today will vote on a similar agreement that would govern pollution controls to be added at a pair of Edison plants near Oxnard and Ventura. And Edison is negotiating with the South Coast Air Quality Management District for an agreement that would cover the company’s electricity generating plants in the greater Los Angeles air basin, Phelps said.

Edison has promised that it would introduce pollution controls to offset any air pollution caused by increased use of its plants caused by the merger.