SCE to Fund Group in Favor of Utility Merger : Organization Labeled ‘Front’ for Company by Opponents of Plan

Southern California Edison has agreed to pay the staff costs of San Diegans for the Merger, a recently formed group that will lobby in support of San Diego Gas & Electric’s proposed merger with Edison. Critics of the merger complained Monday that the new organization is simply a “front group� for the utilities.

Lawrence F. O’Donnell, a La Jolla-based energy-industry consultant who founded the group Monday, said that Edison had awarded his firm, Senior Policy Associates, a contract to perform the group’s staff functions. The group will maintain a small office with two or three staffers, O’Donnell said.

O’Donnell declined to discuss the monetary value of the contract and Edison spokesman Lewis Phelps described the group’s funding as “proprietary information, at the request of Mr. O’Donnell.�

Had Former Link to SCE

O’Donnell acknowledged that his consulting firm has on one occasion contracted to complete a project for Edison. However, Senior Policy Associates has not contracted with SDG&E; for consulting work.

The new organization’s organizing committee includes 17 San Diegans who represent “a cross-section� of county residents and soon will make an initial mailing to gain support, O’Donnell said.

The group hopes to deliver “a clear explanation of merger benefits,� O’Donnell said. “We are disturbed that the merger has become a highly charged, emotional issue with little attention being paid to the benefits we will enjoy as ratepayers and as San Diegans who prize our quality of life.�

One of Many Opinion Groups

San Diegans for the Merger� joins a growing list of groups formed to sway public opinion on the proposed merger that would shift control of SDG&E; to Edison, a Rosemead-based subsidiary of SCEcorp. The merger, which is being studied by the state Public Utilities Commission and the Federal Energy Regulatory Commission, would create the nation’s largest gas and electric utility with 4.8 million customers.

Earlier, a group of influential San Diegans who oppose the merger created the “Coalition for Local Control.� That group includes the Greater San Diego Chamber of Commerce, the San Diego Economic Development Corp. and several consumer and public-interest groups. The anti-merger group hopes to raise $200,000 for its campaign against the merger.

Businessman Fred Schnaubelt has drawn $10,000 from SDG&E; for “Taxpayers Against a Government Takeover,� a group that has pledged to fight a government takeover of SDG&E.; The group has completed some mailings and raised an additional $3,000, Schnaubelt said Monday.

Ratewatchers, a relatively tiny group of San Diego consumers, also has been formed to oppose the merger.

Harsh Words From Foes

O’Donnell’s group “is obviously just a front group for Edison,� complained Bob Hudson, executive director of the Coalition for Local Control. “We just don’t have hundreds of thousands of dollars to go out and hire a crew of clerical workers to come up with massive mailing lists.�

Similarly, Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group, acknowledged that “it would be nice if some of that money was headed to us.�

UCAN, which has been involved in utility regulatory matters since 1983, has yet to take a stance on the merger, but Shames is concerned that the merger won’t produce rate decreases promised by the utilities.

UCAN has 56,000 members and “interest is rising,� according to Shames. UCAN will spend $150,000 to $200,000 to study the utility merger, Shames said.

In addition to funding pro-merger groups, SDG&E; and Edison also have been directly involved in the public debate over their proposed merger. SDG&E;, for example, is now running a $1.5-million advertising campaign that includes radio and newspaper advertising. The campaign will be expanded to include television ads in early June.

The cost of that campaign is being paid by SDG&E;’s shareholders, not its customers, according to utility spokeswoman Karen Duncan.