Ruling is due for Edison merger with San Diego utility.

Ruling is due for Edison merger with San Diego utility

While the eyes of the nation may be turned toward the Persian Gulf, eyes in the utility industry are turned toward San Francisco, where a regulatory official may rule this month on the proposed merger between Southern California Edison Co. and San Diego Gas & Electric Co.

If the California Public Utilities Commission's administrative law judge approves the deal, it would remove one more obstacle to the merger that would create the nation's largest electric utility. The Los Angeles County headquarters of Edison, in the city of Rosemead, would become the base for the merged enterprise. One million customers would be added to Edison's current 4 million load.

While several obstacles still remain, Wall Street analysts believe that if the judge approves, the remaining OKs from the CPUC board and the Federal Energy Regulatory Commission (FERC) will follow later this year.

"If the CPUC judge comes out in favor of it, we expect the deal to go through," said Nathan Partain, a utilities analyst with Duff & Phelps in Chicago.

"But it is not a done deal," Partain said. "If the judge rules against the merger, then when that is coupled with the FERC administrative law judge's rejection of the merger last month, the whole deal could be dead."

The FERC judge recommended the commission board veto the merger on the grounds that it would create an anti-competitive market and reduce customer benefits, FERC spokeswoman Barbara Connors said.

"We've been waiting for word from the administrative law department since November," added Dianne Deinstein, spokeswoman for the CPUC in San Francisco.

"We're expecting the ruling this week, maybe next week, but they've been saying that for some time now," said Edison spokeswoman Diane Wittenberg.

Next would come a public comment period, and then the CPUC board vote within two months at the earliest. Several months later, a final FERC ruling is expected, said Connors.