ALJ/SMW/avs Date of Issuance 11/2/2010

Decision 10-10-023 October 28, 2010

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of San Diego Gas & Electric Company (U902M) for authorization to: (1) issue Debt Securities (First Mortgage Bonds, debentures, overseas indebtedness, foreign securities, medium-term notes, accounts receivable financing), and to enter into long-term loans, in an aggregate principal amount up to $800 million of debt capital, in addition to previously-authorized amounts; (2) issue certain tax-exempt Debt Securities in order to guarantee the obligations of others; (3) include certain features in the Debt Securities or to enter into certain derivative transactions related to underlying debt in order to improve the terms and conditions of the debt portfolio and with the goal of lowering the cost of money for the benefit of ratepayers; (4) issue and sell up to $150 million of par or stated-value Preferred or Preference Stock, in addition to previously authorized amounts; (5) hedge planned issuances of Debt Securities, Preferred or Preference Stock; (6) obtain certain exemptions from the Commission's Competitive Bidding Rule; and (7) take all other necessary, related actions.

Application 10-05-016
(Filed May 17, 2010)

DECISION AUTHORIZING SAN DIEGO GAS & ELECTRIC COMPANY
TO ISSUE UP TO $800 MILLION OF NEW DEBT SECURITIES
AND $150 MILLION OF PREFERRED OR PREFERENCE STOCK

TABLE OF CONTENTS

Title Page

DECISION AUTHORIZING SAN DIEGO GAS & ELECTRIC COMPANY TO ISSUE UP TO $800 MILLION OF NEW DEBT SECURITIES AND $150 MILLION OF PREFERRED OR PREFERENCE STOCK 2 2

4.1. Public Utilities Code Requirements for Issuance of Securities 5 5

4.2. Forecast of Sources and Uses 7 7

4.3. Types of Securities to be Issued 9 9

4.4. Encumbrance of Utility Property 10 10

4.5. Securities Enhancements 11 11

4.6. Competitive Bidding Rule 11 11

4.6.1. Telephonic Bidding 12 12

4.6.2. Debt Securities in Excess of $200 Million 12 12

4.6.3. Securities Not Applicable to Competitive Bidding 13 13

4.6.4. One-Day Notice Period 14 14

4.6.5. Diverse Business Enterprises 15 15

4.6.6. Conclusion 16 16

5. Reporting Requirement 16 16

6. Fee 17 17

7. Financial Information 17 17

8. California Environmental Quality Act 18 18

9. Category and Need for Hearings 19 19

10. Comments on Proposed Decision 19 19

11. Assignment of Proceeding 19 19

Findings of Fact 19 19

Conclusions of Law 21 21

ORDER 24 24

DECISION AUTHORIZING SAN DIEGO GAS & ELECTRIC COMPANY
TO ISSUE UP TO $800 MILLION OF NEW DEBT SECURITIES
AND $150 MILLION OF PREFERRED OR PREFERENCE STOCK

1. Summary

This decision grants San Diego Gas and Electric Company (SDG&E) the authority to issue up to $800 million of new Debt Securities and $150 million of new Preferred or Preference Stock. This decision also authorizes SDG&E to: 1) encumber utility property; 2) guarantee the securities or other obligations of SDG&E's regulated affiliates and regulated subsidiaries, and political subdivisions that issue securities on behalf of SDG&E; 3) enter into Debt Securities and Preferred or Preference Stock enhancement features; 4) receive certain exemptions from the Commission's Competitive Bidding Rule; and 5) report all Debt Securities information required by General Order 24-B on a quarterly basis.