Edison Files Protest to Proposed Merger

As expected, Southern California Edison has formally protested the proposed merger of San Diego Gas & Electric and Southern California Gas, saying the union would undermine the free market for energy the state is trying to create.

The merged company, which would be the largest utility in the country, based on customer count, would control Southern California’s natural gas pipelines and storage, giving it the “ability and incentive . . . to manipulate the availability and price of gas so as to discriminate against its competitors,” Edison said in a filing with the state Public Utilities Commission.

Edison, which lost out on an unfriendly bid in 1991 to merge with SDG&E; because of opposition from regulators, environmental groups and San Diego civic leaders, uses natural gas to generate much of the electricity it sells. Edison’s formal protest also questioned the $1.2 billion in cost savings over 10 years that the merger partners have touted.

Enova and Pacific Enterprises, the parent companies, respectively, of SDG&E; and Southern California Gas, proposed their friendly $4.3-billion merger on Oct. 14. If approved, it would create a San Diego-based utility giant with 5.9 million electricity and gas customers.

The state PUC, which will begin its review next year, said it expects hundreds of protests against the merger, including one from the PUC’s own Office of Ratepayer Advocates, PUC economist Doug Linsey said.

An Enova spokesman declined to comment on the Edison protest, saying the San Diego-based utility holding company was still studying the comments. The merger partners plan to file a formal merger proposal with the PUC later this week, he said.

The merger proposal was announced less than a month after Gov. Pete Wilson signed a utility deregulation law on Sept. 23 designed to break the monopolies of Edison, SDG&E; and Pacific Gas & Electric, the state’s three investor-owned electric utilities. By 2003, Californians will be able to choose power companies.

The merger partners have let it be known that the merged entity would compete aggressively in Edison’s 4.1-million-customer service area once deregulation permits.