ALJ/XJV/lil Date of Issuance 7/21/2011

Decision 11-07-002 July 14, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of San Diego Gas & Electric Company (U902E) to Amend Renewable Energy Power Purchase Agreement with NaturEner Rim Rock Wind Energy, LLC and for Authority to Make a Tax Equity Investment in the Project.

Application 10-07-017 (Filed July 15, 2010)

DECISION APPROVING SETTLEMENT SUBJECT TO CONDITION

1. Summary

Subject to one condition designed to protect the public interest, we approve the all-party settlement which, among its terms, authorizes San Diego Gas & Electric Company (SDG&E) ratepayers and shareholders to make a tax equity investment in what is known as the Rim Rock wind project. Major settlement terms include the following: reducing the Rim Rock power purchase agreement (PPA) from 309 megawatts (MW) to 189 MW, imposing a quantified price cap on the green attributes associated with the PPA, reducing ratepayer funding to no more than $250 million (from the initial request for as much as $600 million), making repayment of shareholder investment subordinate to repayment of ratepayer investment, and ensuring oversight of SDG&E's further due diligence. SDG&E also agrees to limit its future pursuit of Tradable Renewable Energy Credits that are only tangentially associated with California. We condition our approval to require that should the parties negotiate an increase in SDG&E's rate of return under specified settlement provisions, they must seek Commission approval through a petition for modification of today's decision. Finally, we authorize the filing under seal of certain confidential information in the settlement as well as the transactions documents attached to the settlement.