COM/LYN/gig/epg Agenda 1361

Quasi-Legislative

H-6 1/16/2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation whether San Diego Gas & Electric Company, Southern California Gas Company and their holding company, Sempra Energy, respondents, have complied with relevant statutes and Commission decisions, pertaining to respondents' holding company systems and affiliate activities.

I.__________________ FILED PUBLIC UTILITIES COMMISSION SAN FRANCISCO OFFICE INVESTIGATION

ORDER INSTITUTING INVESTIGATION

I. Summary

We issue this Order Instituting Investigation to determine whether respondent utilities, San Diego Gas and Electric Company (SDG&E), Southern California Gas Company (SoCal Gas) and their holding company, Sempra Energy (Sempra) have complied with relevant statutes and Commission decisions in the management, oversight and operations of their companies. As more fully set forth below, we are concerned that respondents' management and actions, have resulted in a situation where unregulated affiliates of the respondent utilities have substantial business activities within the utilities' service territories that create direct conflicts of interests between the utilities (and the utilities' ratepayers) and their unregulated affiliates. In this investigation, the Commission will evaluate the actions of the utilities and their holding company and affiliates to determine if the significant number and breadth of energy-related business activities undertaken by the holding company within the service territories of SDG&E and SoCal Gas have violated Commission decisions, rules, or orders, and/or applicable statutes.