Getting the Ax : Edison Pulling the Plug on O.C. Tree Farm

GARDEN GROVE —  Customers at Manuel Coelho’s cut-your-own tree farm here are calling the electric company the Grinch that stole Christmas.

Manuel’s Top Quality Christmas Tree Farm is one of a dozen such farms covering 60 acres that have been notified that Southern California Edison will not renew their licenses on leased utility land.

Coelho, 67, was told in October that he must vacate his 6 1/2 acres in March 1998. But Coelho moans that he has five years’ worth of trees--worth about $300,000--on the land he has leased from Edison for the last 27 years. The timing couldn’t be much worse: He had just agreed to sell the business to his son for $500,000 and retire.

“They took it out of my pocket,” Coelho said. “That was my retirement. It’s a bum deal.”

Chalk up an unlikely victim of electric industry deregulation. As competition invades the onetime monopolistic business, Edison, the giant investor-owned utility based in Rosemead, must seek ways to reduce rates to hang on to customers.

For the sake of shareholders and its 4.2 million customers, the company said, it is obligated to look for the most appropriate and lucrative “secondary uses” for the thousands of acres that lie beneath its utility towers--much of it in areas that have become more citified over the years. Often, a recreational vehicle parking lot or a mini-storage space can bring in more revenue than a tree farm.

“We’re not targeting Christmas tree growers,” Edison spokesman Kevin Kelley said. “We’re evaluating the secondary uses. We can’t have ratepayers subsidize tree growers.”

But the plight of Manuel Coelho certainly makes for a potential holiday public relations nightmare for Edison. Compounding the company’s appearance of insensitivity is the fact that Coelho fell into the cracks in the notification program. Unlike 11 other growers, who got their letters in October 1995, he didn’t receive his until a year later--just before the start of this holiday season.

And because Edison had no letter on file, the company also didn’t follow up with an offer of a year’s free rent. The company said Friday that it had already made that offer to three other growers whose licenses expire within the next two years. (The licenses of the remaining affected growers run until 1999 or 2000.)

As of Wednesday afternoon, Coelho had not yet been told of the free-rent offer, which would probably save him $7,000 or so. “We just found out 15 minutes ago,” said David Armes, Edison’s manager of real estate sales and revenue. “That offer will be extended to Manuel.”

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That might help ease Coelho’s financial burden--as will the likely sale of his immature trees when he has to vacate the premises. But for his many loyal customers, the prospect of his getting the ax in the not-too-distant future feels like finding the proverbial lump of coal.

“Manuel’s is the most awesome tree farm,” said Phyllis Murphy, a certified public accountant whose family has made a tradition of driving from Fountain Valley to choose and chop its annual yule tree at Coelho’s farm. “We’re growing our own trees in California, and you don’t have to feel guilty about cutting them. It’s old-fashioned fun, and it’s just not the same when you go to Target or Home Depot.

“I’m not sure why [Edison] is doing this. If I have a choice, I won’t be a customer of Edison [anymore],” Murphy said.

Mick Constuble, a retired high school teacher in Rossmoor in Orange County, understands the economics driving Edison’s actions but still feels bad for the Coelhos.

“My son was [little] when we started going to Manuel for trees, and he’s now 36,” he said. “I cherish his family’s friendship.

“It’s easy to say [Edison] should be more understanding and let these fine people stay. At the same time, it would be hard for me to be critical of an effort to improve their business side.”

For obvious reasons, Edison was scrambling Wednesday to avoid looking not only like a Grinch but also like a money-grubber bent on paving paradise (well, it’s all relative under the power lines and towers) and putting up a bunch of parking lots.

Company executives hastened to note that licenses will be renewed for 15 Christmas tree farms in the Southland, representing 130 acres. And displaced tree farmers are being offered licenses on land elsewhere in Edison’s territory--though farther from urban centers.

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More than 4,600 acres of Edison’s 7,000 acres of rights-of-way are devoted to “green uses” such as nurseries or tree or strawberry farms.

Edison said its total acreage dedicated to green uses has increased by an estimated 10% in the last five years, and the company is seeking to expand such uses by studying water rights in the Inland Empire and elsewhere. Not to mention the fact that, when the horticulture and Christmas tree industries were under severe price pressure in 1993 and ‘94, Edison froze its rental rates for all green uses.

But Mike Wade, executive director of the California Christmas Tree Growers, the Merced-based choose-and-cut industry trade group, said Edison’s actions against the growers bode ill for California’s 313 Christmas tree farmers.

“It’s going to shift customers into corner tree lots [which sell mostly freshly cut trees from Oregon and Washington] or artificial trees,” Wade said. “There’s also a loss of greenbelts and open space.”

Besides, he said of Edison’s offer to find tree growers other space, “you can’t just pick up Christmas trees and go.”

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Trees by the Numbers

600,000

Number of choose-and-cut trees sold in 1995 in California

$24

Average price of those trees

$14.4 million

Value to growers of choose-and-cut trees sold

313

Number of California Christmas tree growers (including 85 in Southern California)

3 million

Number of freshly cut trees that come into California each holiday season from Oregon and Washington

Source: California Christmas Tree Growers