Council to Vote on Its Stance in Utilities Merger

The San Diego City Council, which has held five hearings and spent at least $2 million in legal fees to study San Diego Gas & Electric’s proposed merger with Southern California Edison, will take an official stand on the merger at a Nov. 30 public session.

Council members will decide then if they should try to derail the merger that is being reviewed by the state Public Utilities Commission and the Federal Energy Regulatory Commission.

Council members also must determine if the city has the authority to stop the merger by prohibiting SDG&E; from transferring city-granted gas and electric franchise agreements to Edison. Without these normally mundane right-of-way agreements, Edison would be unable to operate utilities in San Diego.

City Atty. John Witt has advised the council that the city can stop SDG&E; from transferring the franchise agreements to Edison because the merger would constitute a legal “transfer” of the franchises.

But, during a Wednesday public hearing at City Hall, SDG&E; and Edison officials argued that the city will have no say in the matter because, according to state law, the merger does not constitute a transfer. “We’re adamant in that position,” said Steven S. Wall, an attorney representing SDG&E.;

“I guess we’re going to see each other in court,” said Mayor Maureen O’Connor, who promised that the City Charter provision that covers utility franchise agreements will be “vigorously defended.” Earlier this year, Councilman Bruce Henderson suggested that the city go to court to determine if the city has a right to prohibit SDG&E; from transferring the franchises.

Edison Vice President Michael Peevey complained Wednesday that the city’s long-running review of the proposed merger suggests that council members have already decided to oppose it.

“There is mounting evidence that you as a city have already made up your mind,” Peevey said. “There have been publicly reported statements by a number of council members declaring their opposition to the merger.”