O R D E R

IT IS ORDERED that:

1. The August 22, 2008 joint motion "For Adoption of Settlement Agreement and Immediate Suspension of Briefing Schedule for Phase One Issues" is granted, and the terms of the Settlement Agreement, which is attached to this decision as Attachment 1, are adopted.

2. San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas) shall take the necessary steps to allocate the net revenues in the Noncore Storage Memorandum Account, as provided for in Paragraph 15 and Paragraph 17 of the Settlement Agreement, and to consolidate the ratepayers' share of the net revenues with the other SDG&E and SoCalGas transportation rate adjustments to be effective January 1, 2009.

3. SoCalGas shall close the SDGE Storage Memorandum Account, the LB Storage Memorandum Account, and the SG Storage Memorandum Account without any adjustment.

4. SDG&E and SoCalGas shall take the necessary steps to incorporate the other provisions in the Settlement Agreement into their gas system and storage operations as each situation contemplated by the Settlement Agreement arises.

5. SDG&E and SoCalGas shall file the necessary advice letters with the Energy Division under Tier 2 of General Order 96-B to carry out the terms of the Settlement Agreement. Any interested party may protest the advice letter filings as provided for in General Order 96-B. For the advice letter seeking to revise transportation rates effective January 1, 2009, SDG&E and SoCalGas shall file that advice letter within five days of today's date, and the protest period for this particular advice letter shall be shortened to 15 days. No additional customer notice is needed for these advice letter filings as provided for in section 4.2 of General Order 96-B.

6. Pursuant to Pub. Util. Code § 1701.5 and for purposes of reviewing the issues delineated in the Scoping Memo of April 17, 2008, Phase 1 is closed.

7. This proceeding remains open to consider the remaining issues in Phase Two.

This order is effective today.

Dated December 4, 2008, at San Francisco, California.

D0812020 Attachment 1 - Settlement Agreement

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