Merger Costs Hit $87 Million

Southern California Edison and San Diego Gas & Electric have spent a combined total of $87 million so far in their attempt to win regulatory and legislative approval at state, local and federal levels for their proposed merger.

Industry observers have predicted that utility executives would find it hard to back away from the merger that was proposed in July, 1988--if only because of the amount of time and money they have already spent.

Edison has spent $69 million on “legal and consulting costs related to the merger regulatory process,” Edison spokesman Lew Phelps said Monday. SDG&E; has spent slightly more than $18 million on the Edison merger and an uncompleted merger that was proposed in 1988 with Tucson Electric Power, SDG&E; spokesman Tom Murnane said.

In both cases, shareholders, not utility customers, have paid for merger-related expenses, the spokesmen said. The money was spent mainly for law firms, investment banking firms and public relations and advertising campaigns, the spokesmen said.

Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group that has opposed the merger, said the “awesome figure is proof that they should cut their losses and stop pursuing the merger.”