City Planning Utility Merger Roadblocks : Government: Buoyed by defeat of the SDG&E-SCE; merger bid, a City Council panel drafts a ballot measure to block future merger attempts.

Turning up the heat on San Diego Gas & Electric Co., a City Council committee Wednesday ordered the drafting of a ballot measure that would enhance the city’s power to block future mergers or sales involving the embattled utility.

The committee also granted conceptual approval for a nine-member Public Utility Advisory Committee that would make recommendations to the council on issues concerning all city utilities, including cable television and telephone service.

Acting at Mayor Maureen O’Connor’s direction, the council’s Rules Committee instructed Assistant City Atty. Curtis Fitzpatrick to draft language reining in SDG&E; that could be put before voters next June.

“I want to do it while I’m here, while the battle is still fresh in everybody’s mind,” O’Connor said. “We’ve learned a lot, and we’re not going to dissipate our learning.”

In a unanimous 5-0 vote May 8, the state Public Utilities Commission dashed Southern California Edison’s three-year quest to merge with SDG&E; and form the nation’s largest electric utility. O’Connor led the high-profile, uphill campaign to defeat the merger and reaped considerable political benefit when the plan was rejected.

On May 21, the council approved a resolution demanding that SDG&E; repay the $6.3 million that the city spent to block the merger, appoint a public representative to the SDG&E; board of directors and clarify the council’s right to veto any merger or sale of the local utility.

The resolution was sent to Thomas Page, chairman of SDG&E;’s board of directors, who quickly responded in a letter that he would be “pleased to meet directly with Mayor O’Connor in the coming weeks to discuss the concepts contained in the resolution.” But no city official has heard from Page since his May 28 letter.

“I’m getting a little concerned about (SDG&E;’s) neighborliness,” O’Connor said. “Even though they say they are going to be good neighbors, it seems to be business as usual.”

If Wednesday’s proposal was intended solely to get SDG&E;’s attention--a suggestion that O’Connor denied--it certainly succeeded. SDG&E; officials, who tuned into the meeting via “squawk boxes” in their offices, took note of the council’s tone.

“I think the impatience was quite clear,” said Karen Hutchens, governmental affairs director for SDG&E.;

Hutchens said the company has been involved in an exhaustive evaluation of its mission and direction now that the merger has been denied, a process that must be completed before Page can sit down with O’Connor, Hutchens said.

“Mr. Page does not want to waste Mayor O’Connor’s time until he has something to say,” she said. “We want to have our total direction together so we can let the mayor know where we’re going.”

Hutchens refused to predict when Page will meet with O’Connor, saying that it would happen “when the time is appropriate.”

In a prepared statement, Hutchens also pledged to work with any advisory committee that the city appoints.

For their part, O’Connor and council members Abbe Wolfsheimer, Wes Pratt and Judy McCarty were vague about how the City Charter and the city’s franchise agreement with SDG&E; could be reworked to strengthen the city’s hand.

O’Connor even suggested that SDG&E;’s franchise to provide electricity and gas to city residents could be put out to competitive bid when it expires in the year 2020. But the mayor conceded that she does not know which other utility would be in position to replace SDG&E.;

“I have no idea,” she said. “The point is we are going to get the best deal for this city, and we’re no longer going to be at the mercy of the franchisee.”

Fitzpatrick noted, however, that language in the city’s franchise agreement with SDG&E; gives voters the right to modify, if not repeal, the agreement.

For now, the matter of ballot language will be left up to city attorneys, who will present it to the committee in September. The full nine-member council must vote on whether to place a ballot measure before voters.

The City Charter already contains language that city attorneys believe would have prevented a merger without the council’s consent, a key point that SDG&E; and Edison lawyers contested. The city filed suit Feb. 13, 1990, asking a judge to rule on the city’s power to approve or reject a franchise transfer but received no determination before the state Public Utilities Commission voted May 8 to block the merger of the two utilities.

That suit is still pending, though the city is offering to dismiss Edison as a defendant. The lawsuit against SDG&E; will be kept alive, Fitzpatrick said, because it may serve as a vehicle to define the city’s powers to block future mergers.