Foes of Merger Want Accord With SDG&E; : Peace offering: San Diego alliance that fought the failed SCE-SDG&E; merger is ready for a reconciliation.

SAN DIEGO — The unusual alliance of San Diegans who fought long and hard to derail Southern California Edison’s planned merger with San Diego Gas & Electric Thursday set about mending fences with executives at the local utility.

“This is a day for reconciliation, not recriminations,” said Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group that joined other civic, business and environmental groups to form the Coalition for Local Control, which fought against the merger.

The effort to ease strained relationships between San Diegans and SDG&E--particularly; with SDG&E; Chairman Tom Page--began less than 24 hours after the state Public Utilities Commission unanimously voted to prohibit Edison from merging with SDG&E; and creating the nation’s largest investor-owned utility with 5.1 million customers.

The utilities are studying a possible appeal, but most observers believe that an appeal would be an expensive but fruitless process.

During a Thursday press conference at the Greater San Diego Chamber of Commerce’s downtown headquarters, the Coalition for Local Control extended tentative offers to work with Page--if SDG&E; abandons the merger and meet several demands now being formulated by coalition members.

“We do have some unfinished business,” said San Diego Mayor Maureen O’Connor, a coalition member who did not appear at Thursday’s press conference. “Tom Page and his executives are professionals, as are we on this side of the street. I’m hopeful that we can resolve (those issues) in a positive fashion.”

Shortly after Wednesday’s stunning PUC vote, Page spoke briefly with O’Connnor, Chamber of Commerce President Lee Grissom and County Supervisor Susan Golding. O’Connor said that Page asked her to refrain from tackling merger-related issues until after the utilities decide whether to appeal.

“At the appropriate time we will talk,” O’Connor said. “There are some things I’d like to see worked out. The main one is doing something so the community never has to be put through this again.”

Page has suggested that merger opponents and proponents might find common ground because both sides are acting “based on their interpretation of what is best for the customers of this corporation . . . . I would suggest to you that the common denominator is already in place.”

During Thursday’s press conference, representatives of UCAN, the Chamber, the Sierra Club and the International Brotherhood of Electrical Workers pledged to work with Page and other SDG&E; executives.

For some coalition members, that willingness to work with the long-time utility executive represents something of a turnaround. Both Grissom and Shames, for example, previously expressed serious misgivings about Page’s ability to continue running SDG&E.;

“I think he’s lost credibility internally, inside the company, as well as in the business community,” Grissom said in a February interview. Similarly, Shames earlier suggested that Page might best serve the company as a consultant because “he has no credibility, not within the community or in his own company.”

But Shames on Thursday indicated that Page could regain that lost confidence by abandoning the merger and working with the community to secure “San Diego’s energy future.”

During the coalition’s press conference, Shames and others unveiled several steps which were described as essential if utility managers are to regain San Diegans’ confidence.

The still-evolving list includes:

Creation of a blue-ribbon utility oversight committee that would be appointed by the San Diego City Council and the San Diego Board of Supervisors. The group would be patterned after committees that former Mayor Pete Wilson created during the early 1980s when SDG&E; was gaining unwanted notoriety for electric rates that were among the nation’s highest.

Ed Guiles, SDG&E;’s vice president for corporate planning, declined to comment on whether SDG&E; would be willing to submit to that degree of public scrutiny. “That’s premature from out standpoint,” Guiles said.

Some coalition members argue that SDG&E; is penalizing employees and executives who have opposed the merger. “Generally, employees are not reluctant to voice their opinions unless there are concerns” about retribution, Shames said.

But David Moore, business manager for the International Brotherhood of Electrical Workers, which represents several thousand SDG&E; employees, on Thursday argued that SDG&E; has “never” prohibited union-represented employees from speaking their mind. Moore also said that he knew of no instances when IBEW-represented employees, who have been outspoken in their opposition to the merger, had been punished.

Guiles said that punishing employees for speaking against the merger was against the “corporate values and corporate culture which calls for use to make sure that we deal with all employees in a fair and equitable manner.”

Shames demanded that SDG&E; appoint two new board members who would replace O. Morris Sievert and Charles (Red) Scott, the two San Diego businessmen who voted against the merger in 1988 prior to resigning from the board to protest the deal. The company had indicated that the two slots wouldn’t be filled because of the pending merger. Shames, however, wants a full board compliment to ensure that the utility gets the kind of guidance needed to safeguard the county’s energy future.

The city might seek reimbursement from SDG&E; for the $6 million that the City Council allocated for fighting the merger. O’Connor said that it would be “nice to get back some of our legal fees” generated by the merger. However, O’Connor added that “we’re going to have to leave it up to the attorneys” to determine whether the cash-strapped city has any legal grounds for seeking such a reimbursement from SDG&E.;

Guiles declined to comment on whether SDG&E; would be willing to absorb the city’s anti-merger expenses.

While groups such as UCAN typically can petition the PUC for reimbursement of their expenses, state law expressly prohibits municipal governments from obtaining reimbursement. “I don’t believe we’ve ever awarded anything to a municipal entity,” PUC spokesman Rob Ferraru said.

One observer suggested that O’Connor, by making public her desire to seek compensation from SDG&E;, is simply “starting to develop her negotiation tactics . . . she’s putting her cards on the table as to what she expects from the company (absent a merger) and her statements (about the $6 million) might be leverage she needs.”

The city also might try to rewrite the franchise agreement that gives SDG&E; the right to provide utility service in the city. O’Connor wants the document to include a clause that gives the city veto power over any future merger attempts.

In related developments on Thursday, spokesmen for both SDG&E; and Edison indicated that the utilities won’t decide on an appeal until next week at the earliest. “We haven’t seen a written decision yet,” Edison spokesman Lewis Phelps said.

Page on Thursday left for New York City where he will brief analysts on the utility’s plans should the merger not be completed. John Bryson, chairman of SCEcorp, Edison’s Rosemead-based parent company, was in San Diego on Thursday to give a speech at an energy conference. The timing was “purely coincidental,” Phelps said.

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