6. Assignment of Proceeding

President Michael R. Peevey is the assigned Commissioner and Carol A. Brown is the assigned ALJ in this proceeding.

1. SDG&E has a need for the 46.5 MW from the MEF II project to serve the needs of its bundled electric customers for summer 2009.

2. SDG&E's contract with MEF II for an EPC contract with Wellhead and General Electric to supply 46.5 MW of peaking capacity and energy is a reasonable option to meet the need for SDG&E's bundled customers.

3. SDG&E conducted a 2008 Peaking RFO and offered the Miramar site and already purchased equipment to bidders for a turnkey project, but no offers were received.

4. Since no offers were received for a turnkey project at the Miramar site, the procedures SDG&E took to secure an EPC contract for the site were reasonable under the unique circumstances of this application.

5. SDG&E's proposed construction risk/reward mechanism is reasonable.

6. SDG&E's request to recover the costs of the MEF II project through bundled ratepayer rates is reasonable.

1. The EPC contract for 46.5 MW of peaking capacity and energy, deliverable by summer 2009, on the Miramar site is reasonable and should be approved.

2. The costs of the MEF II facility should be recovered from SDG&E's bundled ratepayers.

ORDER

IT IS ORDERED that:

1. We authorize San Diego Gas & Electric Company (SDG&E) to enter into a project with Miramar Energy Facility II (MEF II) for an Engineering, Procurement and Construction contract with Wellhead Services, Inc. and General Electric for the supply of a simple cycle gas-fired combustion turbine with a capacity of approximately 46.5 megawatts to provide peaking energy and capacity.

2. We authorize SDG&E to collect the costs of the MEF II facility through rates from its bundled ratepayers.

3. Application 08-06-017 is closed.

This order is effective today.

Dated January 29, 2009, at San Francisco, California.

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