San Diego Gas & Electric Co. officials are planning to hold a shareholders meeting April 22 but they aren't sure which company--the 105-year-old gas and electric utility or a proposed multifaceted holding company that SDG&E wants to create--will act as host.
The confusion has been generated by a time-consuming state Public Utility Commission review of the holding company proposal, which, if approved, would allow the utility to diversify into non-utility businesses.
Commissioners, who had included the proposal on their regular Wednesday agenda--the fourth Wednesday appearance since Feb. 5--indicated that they would vote on SDG&E's holding company proposal during a special session in San Francisco on March 28.
Although Commissioner President Donald Vial has publicly stated that utilities must be allowed to diversify beyond traditional utility businesses, commissioners have not reached agreement about what kind of restrictions should govern a holding company. That type of company would house both a regulated utility and a host of unregulated businesses.
Wednesday's delay came about because commissioners were studying three proposals that would apply differing levels of PUC control over the proposed holding company.
Although SDG&E managers acknowledge that the holding company issue is complex, the on-the-agenda and off-the-agenda status of their proposal has forced the utility to toss out many normal planning procedures, according to Stephen Edwards, SDG&E's manager of special projects.
"It is a very difficult management process when something this significant is pending and unresolved," Edwards said. "The uncertainty does cause a lot of false starts in the planning process."
SDG&E managers consequently have been paying attention to what Edwards called the "drop dead" dates--dates when the company can no longer wait for the PUC to make a decision.
The confusion about the annual meeting was one product of that time-consuming review, Edwards said. Technically, the meeting will be held to review SDG&E's 1985 performance, said Edwards, who added that company managers had hoped to unveil the holding company's still-secret name and logo.
Another 'Drop Dead' Date
(In legal documents, the proposed holding company has been referred to as "SDO Parent Co." SDO is SDG&E's stock-market symbol.)
SDG&E hit another "drop dead" date when it came time to mail out annual reports for 1985. Although the company designed covers featuring the old and new logos, "we came to the point when we just didn't have any production time left and we had to bite the bullet" and keep the old logo, Edwards said.
"The last thing we wanted was 100,000 pieces of literature that are not usable," Edwards said. "So by very early March we had to have a definitive resolution."
The same set of unknowns forced SDG&E to hold open a gaping hole in a Securities and Exchange Commission filing--just in case the commission approved the holding company proposal before the document was printed.
"There were a number of things during the first quarter, which is a very active financial reporting period," said Edwards, who has been shepherding the holding company proposal through PUC review.
However, should the PUC approve the holding company proposal prior to the April 22 meeting, shareholders still might not get to see the new company name and logo. SDG&E's board of directors might decide not to form the holding company if utility commissioners vote to approve the holding company but at the same time include restrictions that the board considers to be unreasonable.