5. Approval of the Requested Cost Recovery Mechanism

Consistent with the established and previously authorized regulatory accounting and cost recovery of its current DR programs and the request in its 2009-2011 DR Program Application (A.) 08-06-002, SDG&E requests that the same regulatory accounting and cost-recovery mechanism be applied to the Amended and Restated EnerNOC Agreement. Specifically, SDG&E proposes that the operation and maintenance expenses, capital related costs (i.e., depreciation, return and taxes), contractual payments, and all other contract costs associated with the EnerNOC agreement be recorded in the existing Advanced Metering and Demand Response Memorandum Account (AMDRMA). SDG&E also proposes that there be no change to the existing disposition of the AMDRMA balances previously authorized by the Commission. AMDRMA balances would be transferred to the Rewards and Penalties Balancing Account on an annual basis for amortization in SDG&E's electric distribution rates over 12 months, effective on January 1 of each year, consistent with SDG&E's adopted tariffs.

SDG&E's accounting and cost-recovery proposals are reasonable and will be adopted.