Opinion No. (1998)

DANIEL E. LUNGREN Attorney General J. LINDSAY BOWER Deputy Attorney General THE PUBLIC UTILITIES COMMISSION has requested an advisory opinion, pursuant to Public Utilities Code section 854 , on the following questions: 1. Will the proposed merger between Pacific Enterprises and Enova Corporation adversely affect competition? 2. What mitigation measures could be adopted to avoid any adverse effects on competition that do result? CONCLUSIONS 1. The proposed acquisition between Pacific Enterprises and Enova Corporation should not by itself adversely affect competition in the markets for interstate gas or wholesale electricity. 2. The merger may eliminate the disciplining effect of San Diego Gas Electric as a potential competitor in the partially regulated intrastate gas transmission market. We recommend that the Commission consider requiring the merged entity to auction offsetting volumes of transportation rights within that system. ANALYSIS The proposed merger of Pacific Enterprises and Enova Corporation is a response to the mandatory restructuring of the electric industry which began on January 1, 1998. Through their subsidiaries, Pacific is the leading southern California supplier…