Mayor’s ‘Suspicions’ Lead to Vote Delay on SDG&E; Bond Plan

Mayor Maureen O’Connor harbors “deep suspicions” about the motives of San Diego Gas & Electric and fears a set of numbers put forward this week about a proposed refinancing measure are inaccurate and may mask future merger plans, the mayor’s spokesman said Wednesday.

In the latest round of an ongoing feud between O’Connor and the utility’s board of directors, the City Council agreed Tuesday to delay for one week a vote on an SDG&E; plan for a $400-million bond refinancing measure that the utility says would save the average ratepayer $3.30 a year.

The postponement came at the mayor’s urging, as did a council vote to reaffirm a resolution seeking $6.3 million in reimbursement for legal fees incurred in the city’s successful opposition to SDG&E;’s failed merger with Southern California Edison last year.

O’Connor also succeeded in packing into the resolution a proposal to place a public member on the SDG&E; board and to place on the November ballot an initiative giving city officials veto power over any future merger or sale.

Paul Downey, the mayor’s press secretary, said Wednesday that O’Connor’s worst fear is that the utility is once again seeking ways of making itself attractive for a potential merger or buyout. He did not dispute the notion that a full-fledged feud is being waged.

“She has deep suspicions about them,” Downey said. “Her opposition is based solely on the numbers. The numbers don’t pencil out.

“Her concern is that they’re not willing to give the council authority about whether such bonds could be transferred at a later date,” Downey said.

“If SDG&E; would just come forward and give us an ironclad guarantee on the (bonds), then we’d have a deal. But right now, the information they’re providing doesn’t support” the mayor changing her stance.

SDG&E; executive Ronald K. Fuller said Wednesday that he was “surprised” by the mayor’s vehement opposition at Tuesday’s council meeting.

“I was frankly confused by what was happening, because I have felt we’ve made a lot of progress in working with the mayor recently in areas of mutual interest,” Fuller said.

However, Fuller did not rule out a future buyout or merger.

“I’m not personally aware of such prospects, but our chairman (and chief executive officer, Thomas A. Page) has indicated you can’t count that out,” Fuller said. “Forever is a very long time, although, at the moment, we have no plans” for a buyout or merger.

O’Connor was opposed at Tuesday’s meeting by Councilman Tom Behr and supported by Councilman George Stevens, who argued that ratepayers have been forced to support “every decision made by SDG&E;,” including Page’s salary of more than $700,000 a year.

“I want to continue to ask a lot of questions. I want to find out a lot of information for myself,” Stevens said. “SDG&E; has never been scrutinized like it should have been. They incur so many expenses, which they pass on to ratepayers, which have nothing to do with energy. . . .

“I mean, they just paid $25,000 to become members of the Chamber of Commerce, and that’s a cost passed on to ratepayers. That’s got to stop.”

Councilman Behr, who was joined by Councilman Ron Roberts in siding with SDG&E;, said he did not know “all the parameters” of the utility’s plan to seek $400-million worth of tax-exempt, industrial-development bonds that the company argues will save $65 million during the next 25 years.

“I do feel we’re in the middle of something,” Behr said, alluding to the feud between the mayor and SDG&E;, “and it’s really difficult to vote in that situation.”

Behr said the utility has a “fiduciary responsibility” to try to lower its rates whenever it can, and at whatever percentage, and despite the fact that the savings might be small initially, “they have a cumulative effect that is ultimately passed on to consumers.”

“If it helps the consumer and doesn’t cost the city anything, then I want to benefit the consumer,” Behr said. “I don’t care if it’s a penny here or a penny there. It all adds up.”

Downey said that, despite the fears about a possible buyout or merger, the reported savings of $3.30 a year per consumer “just isn’t a good deal for the city or for ratepayers. That pencils out to less than a penny a day, and they couldn’t even substantiate that.

“We want to go through all of this with a fine-tooth comb and make sure it’s a good deal for the city. . . .

“The mayor continues to have a deep-seated suspicion about SDG&E.; They’re the same people who told us the merger would result in lower rates and would reduce air pollution. Well, as we all know from the (Public Utilities Commission’s recent) rulings, rates have gone up substantially, and there’s been a big increase in air pollution.

“Their word just hasn’t been truthful in the past.”

Fuller, the SDG&E; executive, said an annual savings of $3 is “very important to a person on a fixed income. And an annual savings of $65,000 to the city might save the jobs of at least two city employees--if layoffs are threatened.”

Fuller said the utility remains opposed to reimbursing the city $6.3 million in legal fees and that the issue of a public member on the SDG&E; board “is a matter for our board and Mr. Page.”

But in terms of a November ballot initiative requiring council approval of a future buyout or merger, Fuller said, “It is our legal viewpoint that that can never be done, therefore it is a moot point.”