Lungren Brief Aids Merger of Utilities

State Atty. Gen. Dan Lungren on Friday sided with executives at San Diego Gas & Electric and Southern California Edison in an argument over the meaning of a key phrase in a state law that regulates utility mergers.

Lungren, a Republican who took office in January, criticized a legal opinion that former Atty. Gen. John Van de Kamp, a Democrat, issued in May, 1990. Lungren’s 21-page brief, filed Friday with the state Public Utilities Commission, described Van de Kamp’s opinion as lacking a “sound legal footing.”

Lungren’s opinion is important because commissioners will utilize it later this year when they measure the competitive impact the merger would have on remaining utilities in Southern California.

Utility executives Friday welcomed Lungren’s interpretation of the controversial phrase that, along with other regulatory roadblocks, threatens to dash Edison’s plan to absorb SDG&E; and create the nation’s largest investor-owned utility.

Lungren “has presented the sensible view that the merger should be evaluated on the basis of customer welfare,” Edison spokesman Lewis Phelps said Friday. “By that test, we believe the merger should be approved so that the customers . . . can obtain the benefits of the merger, including more than $1 billion of rate savings.”

Attorneys for the city of San Diego, which has spent $6 million in legal and consulting fees in an attempt to stymie the merger, declined to comment on Lungren’s opinion, which was released late in the day.

Lungren last month surprised merger opponents when he questioned the legal reasoning that Van de Kamp used to determine the meaning of the phrase that prohibits mergers that “adversely affect competition.” Earlier this year, two PUC law judges, who relied heavily upon Van de Kamp’s “narrow” opinion, recommended that the merger be denied.

Lungren is urging commissioners to abandon the Van de Kamp interpretation and instead utilize a “broad” reading that includes a “balancing” of the planned merger’s “pro-competitive and anti-competitive” impacts.