6. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Mark Wetzell is the assigned ALJ in this proceeding.

1. Since SDG&E would benefit from the DCA's provision for a prepaid rent payment from Citizens that is estimated at $83 million, that payment does not provide a public benefit.

2. The DCA's provision for Citizens' funding of low-income assistance programs in Imperial County, estimated at $1 million per year, is a public benefit.

3. The DCA provides an intangible and unmeasured public benefit by enhancing Citizens' viability as a competitor in transmission development.

4. Because the DCA's provision for stability in the capital cost recovery component of Citizens' transmission rate could result in ratepayers paying either more or less than they would if SDG&E retained control of the Border-East Line, such rate stability is a ratepayer benefit.

5. Fully depreciating Citizens' proportionate share of the Border-East Line in 30 years rather than the full life of Sunrise shifts cost responsibility among ratepayers to the benefit of ratepayers in the early years of the lease, but does not provide a net benefit to ratepayers over the 30-year term of the lease.

6. The DCA's provision for levelized capital cost recovery over the 30-year term of the lease (compared to conventional ratemaking) provides a net benefit to ratepayers, because ratepayers are paying a constant amount for the lease period that will not increase with money-costs.

7. Over the 30-year life of the DCA, all California CAISO electric ratepayers might pay Citizens more (estimated between 0.6% and 5.8%) or possibly less in transmission charges than they would pay SDG&E if it retained control of the entire transfer capability rights over the Border-East Line.

1. Consistent with prior Commission decisions regarding Section 851, the minimal standard of review for approval of the DCA is whether it is adverse to the public interest, which includes ratepayer interest.

2. The DCA potentially could cost CAISO electric ratepayers more than they would pay without the DCA (if it is assumed that SDG&E's capital costs do not increase over the next 30 years). While estimates of the next 30 years involve multiple factors over which no party has control, it is in the public interest to authorize the Citizen's lease with SDG&E.

3. The foreseeable public interest benefits of the DCA offset any potential harm it could cause to ratepayers.

4. Application 09-10-010 should be approved, and the proceeding should be closed.

5. The following order should be effective immediately.

ORDER

IT IS ORDERED that:

1. The request of San Diego Gas & Electric Company for authority pursuant to Public Utilities Code Section 851 to lease transfer capability rights along the Imperial Valley section of its Sunrise Powerlink Transmission Project
(Border-East Line) to Citizens Energy Corporation is granted.

2. San Diego Gas & Electric Company is directed to file the final lease with Citizens Energy Corporation pursuant to a Tier 1 Advice Letter. The final lease shall include terms reflecting San Diego Gas & Electric Company's proposed treatment of bonus depreciation so that Citizens can pass this benefit through to its customers.

3. Application 09-10-010 is closed.

This order is effective today.

Dated May 26, 2011, at San Francisco, California.

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