Justice Dept. Approves Enova, Pacific Enterprises Merger

The planned merger of the parents of Southern California Gas and San Diego Gas & Electric cleared a major hurdle Monday with the approval of the U.S. Justice Department.

The government’s blessing was conditioned on the already announced plans by Enova Corp. of San Diego and Pacific Enterprises of Los Angeles to sell fossil-fuel power plants at Carlsbad and Chula Vista that are owned by San Diego Gas & Electric. SDG&E; is also selling its 20% interest in the San Onofre Nuclear Generating Station.

Pacific Enterprises and Enova unveiled plans in October 1996 to merge in a nearly $6-billion deal. The two utilities would be operated separately, but combined would have about 6 million customers, more than any other utility in the nation.

The Justice Department consent also requires Sempra Energy, the company that would result from the merger, to get Justice Department approval to acquire any existing California power generation facilities in excess of 500 megawatts. But Sempra Energy would be free to acquire facilities outside California, or buy or build cogeneration or new generation plants inside California.

Southern California Edison, which continues to oppose the merger, said the agreement does not go far enough in ensuring competition. Edison contends that the new company would be able to influence the price of electricity by controlling the supply of gas used to generate electricity.