8. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Seaneen M. Wilson is the assigned ALJ in this proceeding.

Findings of Fact

1. SDG&E filed its application on October 1, 2010, and its amended application on January 14, 2011.

2. SDG&E's amended 2011 ERRA revenue requirement is $755.413 million.

3. SDG&E's amended 2011 CTC revenue requirement is $63.354 million.

4. SDG&E is not seeking authority to increase ERRA related rates.

5. SDG&E is seeking authority to increase CTC related rates.

6. SDG&E's updated ERRA and CTC forecast are a total of $56.097 million lower than forecast for 2010.

7. Using the updated market benchmark data estimated by SDG&E and the calculation methodology described in D.06-07-030 (as modified in D.08-01-030), SDG&E's 2011 market benchmark price is $44.33/MWh for calculating the PCIA and $42.50/MWh for calculating the Ongoing CTC.

8. SDG&E was granted authority in D.06-09-021 to recover equity rebalancing costs associated with its OMEC PPA through the ERRA.

9. D.07-12-049 did not address any revisions to the authority granted SDG&E in D.06-09-021 regarding the OMEC PPA.

Conclusions of Law

1. SDG&E's amended 2011 requests consisting of a: (a) forecasted 2011 ERRA revenue requirement of $755.413 million; (b) forecasted 2011 Ongoing CTC revenue requirement of $63.354 million; and (c) 2011 market benchmark price of $44.33/MWh for calculating the PCIA and $42.50/MWh for calculating the Ongoing CTC, are reasonable and should be adopted.

2. SDG&E should continue to recover equity rebalancing costs associated with its OMEC PPA, to the extent authorized in D.06-09-021.

3. SDG&E's request to modify its monthly ERRA trigger calculation to allow offsets of Under or Over-collections with the balance in its NGBA should be adopted as follows:

a. Offset an ERRA under-collected balance with a NGBA over-collected balance; or

b. Offset an ERRA over-collected balance with a NGBA under-collected balance; and

c. Offset the ERRA balance with the NGBA balance prior to dividing it by the prior year's annual recorded electric revenues, excluding DWR revenue; and

d. Advise the Commission that it has implemented a NGBA-offset by including both the standard ERRA trigger calculation and the NGBA-offset trigger calculation in its monthly ERRA compliance report to the Commission.

4. The assigned ALJ's rulings made on February 15, February 25, March 22, and April 19, 2011 should be confirmed.

5. SDG&E's and DRA's testimony (Attachment A to this decision) should be received into evidence.

6. SDG&E's request to seal portions of the evidentiary record, including Exhibits SDGE-1C, -2C, -3C, and -4C, should be granted for three years.

7. Portions of the evidentiary record, including Exhibit DRA-1C, should be sealed for three years.

8. SDG&E should file a Tier 1 Advice Letter to implement the revenue requirement in this order by September 1, 2011.

9. Our preliminary categorization as ratesetting and conclusion that no hearings were necessary in A.10-10-001 should be affirmed.

10. Today's decision should be made effective immediately.

11. A.10-10-001 should be closed.

ORDER

IT IS ORDERED that:

1. San Diego Gas & Electric Company's amended 2011 projections for the following ratesetting inputs are adopted and must be implemented: 1) Energy Resource Recovery Account forecast revenue requirement of $755.413 million; 2) Ongoing Competition Transition Charge forecast revenue requirement of $63.354 million; and 3) 2011 market benchmark price of $42.50/megawatt-hour for calculating the Ongoing Competition Transition Charge and $44.33/megawatt-hour for calculating the Power Charge Indifference Adjustment.

2. San Diego Gas & Electric Company must continue to recover equity rebalancing costs associated with its Otay Mesa Energy Center Purchase Power Agreement as authorized in Decision 06-09-021.

3. San Diego Gas & Electric Company's request to modify its monthly Energy Resource Recovery Account trigger calculation to allow offsets of under- or Over-collections with the balance in its Non-Fuel Generation Balancing Account (NGBA) is adopted as follows:

a. Offset an Energy Resource Recovery Account under-collected balance with a NGBA over-collected balance; or

b. Offset an Energy Resource Recovery Account over-collected balance with a NGBA under-collected balance; and

c. Offset the Energy Resource Recovery Account balance with the NGBA balance prior to dividing it by the prior year's annual recorded electric revenues, excluding Department of Water Resource revenue; and

d. Advise the Commission that it has implemented a NGBA-offset by including both the standard Energy Resource Recovery Account (ERRA) trigger calculation and the NGBA-offset trigger calculation in its monthly ERRA compliance report to the Commission.

4. The assigned Administrative Law Judge's rulings dated February 15, February 25, March 22, and April 19, 2011 are confirmed.

5. The prepared testimony of San Diego Gas & Electric Company and the Division of Ratepayer Advocates (Attachment A to this decision) is received into evidence.

6. The request of San Diego Gas & Electric Company (SDG&E) to seal portions of the evidentiary record, including Exhibits SDGE-1C, -2C, -3C, and -4C, and the need to seal Exhibit DRA-1C, due to inclusion of some of the same confidential SDG&E information in that exhibit are granted for three years. The information will remain under seal for a period of three years after the date of this order. During this three-year period, this information may not be viewed by any person other than the assigned Commissioner, the assigned Administrative Law Judge, the Assistant Chief Administrative Law Judge, or the Chief Administrative Law Judge, except as agreed to in writing by SDG&E, the Division of Ratepayer Advocates (DRA), or as ordered by a court of competent jurisdiction. If SDG&E or the DRA believes that it is necessary for this information to remain under seal for longer than three years, SDG&E or the DRA may file a new motion at least 30 days before the expiration of this limited protective order.

7. San Diego Gas & Electric Company must file a Tier 1 Advice Letter to implement the authority granted herein by September 1, 2011. The tariffs filed in the Advice Letters shall become effective on or after the date filed subject to Energy Division determining they are in compliance with this decision.

8. The preliminary categorization of this proceeding as ratesetting, and the preliminary determination that no hearings were necessary, are affirmed.

9. Today's decision is effective immediately.

10. Application 10-10-001 is closed.

This order is effective today.

Dated July 28, 2011, at San Francisco, California.

MICHAEL R. PEEVEY

President

TIMOTHY ALAN SIMON

CATHERINE J.K. SANDOVAL

MARK J. FERRON

Commissioners

I abstain.

/s/ MICHEL PETER FLORIO

Commissioner

Attachment A

EXHIBIT INDEX

A.10-10-001 - SDG&E ERRA Forecast

(END OF ATTACHMENT A)