Suitor Pledges Rate Cut After Utilities Merge : SCEcorp Chief Prods SDG&E;, Lists ‘Benefits’

SAN DIEGO â€”  Howard Allen, SCEcorp chairman and chief executive, on Monday promised an immediate 10% electric rate decrease for San Diego Gas & Electric’s residential customers if the San Diego-based utility’s directors agree to merge SDG&E; with Southern California Edison.

Allen, in a prepared release issued Monday, said he found it “difficult to believe� that SDG&E;’s board could “look at the benefits to consumers, the communities served and shareholders, and not support� the $2-billion stock-swap merger that Edison proposed to SDG&E; in late July.

Spokesmen for both utilities said Monday that a Friday deadline set by Edison for SDG&E;’s response could be extended. “If they need more time to study it, we’ll be flexible,� Edison spokesman Lewis M. Phelps said. “But we would like some response by Aug. 12. We have not gotten any response yet from SDG&E.;�

Condition of Merger

An SDG&E; spokesman declined to comment on SCE’s merger proposal. However, SDG&E; Chairman Thomas Page said last week that he wants to complete SDG&E;’s previously announced merger with Tucson Electric Power, an Arizona-based utility. “Our utility is not up for sale,� Page said.

The proposed Edison/SDG&E; merger would create the nation’s largest electric utility with 4.8 million customers. However, Edison predicated its merger proposal on SDG&E; abandoning the Tucson merger.

Allen on Monday repeated his July 26 claim that the financial benefits of SCE’s proposal outweigh those contained in SDG&E;’s proposed Tucson merger. SDG&E;’s shareholders would realize an immediate 10% dividend increase and a 17% gain in earnings per share if SDG&E; merges with Edison, according to Allen. And, Edison’s merger proposal promises a “better opportunity� for future dividend growth, Allen said.

Allen said that, within six months of completing the proposed merger, Edison would seek regulatory approval for a 10% residential rate decrease because of “increased efficiency.� SCE’s merger proposal would not immediately affect electric rates for SDG&E;’s commercial and industrial customers, a spokesman said Monday.