STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

July 19, 2001

Wrong cover letter...Virginia Laya has correct edit

TO: PARTIES OF RECORD IN INVESTIGATION 01-04-002, ET AL.

This is the draft alternate decision of Commissioner Henry Duque. It will be on the Commission's agenda at the meeting on August 2, 2001. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Pursuant to Rule 77.6(d), comments on the draft decision shall be filed and received by July 26, 2001, and no reply comments will be accepted.

In addition to service by mail, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including advisor Lynne McGhee at lmc@cpuc.ca.gov. Finally, comments must be served separately on the Assigned Commissioner.

/s/ LYNN T. CAREW

Lynn T. Carew, Chief

Administrative Law Judge

LMC:mlt

Attachments

COM/HMD/mlt DRAFT Item H-13a

8/2/2001

Decision ALTERNATE DRAFT DECISION OF COMMISSIONER

DUQUE (Mailed 7/19/01)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation whether Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, and their respective holding companies, PG&E Corporation, Edison International, and Sempra Energy, respondents, have violated relevant statutes and Commission decisions, and whether changes should be made to rules, orders, and conditions pertaining to respondents' holding company systems.

Investigation 01-04-002

(Filed April 3, 2001)

In the Matter of the Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) for authorization to implement a plan of reorganization which will result in a holding company structure.

Application 87-05-007

(Filed May 6, 1987)

In the Matter of the Application of San Diego Gas & Electric Company (U 902-M) for Authorization to Implement a Plan of Reorganization Which Will Result in a Holding Company Structure.

Application 94-11-013

(Filed November 7, 1994)

In the Matter of the Application of Pacific Gas and Electric Company (U 39 M) for Authorization to Implement a Plan of Reorganization Which Will Result in a Holding Company Structure.

Application 95-10-024

(Filed October 20, 1995)

Joint Application of Pacific Enterprises, Enova Corporation, Mineral Energy Company, B Mineral Energy Sub and G Mineral Energy Sub for Approval of a Plan of Merger of Pacific Enterprises and Enova Corporation With and Into B Mineral Energy Sub ("Newco Pacific Sub") and G Mineral Energy Sub ("Newco Enova Sub"), the Wholly Owned Subsidiaries of a Newly Created Holding Company, Mineral Energy Company.

Application 96-10-038

(Filed October 30, 1996)

DECISION GRANTING MOTIONS TO DISMISS
FOR LACK OF JURISDICTION

I. Summary

Respondents PG&E Corporation (PG&E Corp.), Edison International (EIX), and Sempra Energy (Sempra) (collectively, the holding companies), move to dismiss for lack of subject matter jurisdiction. PG&E Corp. is the holding company for Pacific Gas & Electric (PG&E). EIX is the holding company for Southern California Edison, and Sempra Energy is the holding company for San Diego Gas & Electric. The respondent holding companies contend that the Commission lacks jurisdiction over them because they are not public utilities. We agree.

The Commission has jurisdiction over the electric utilities to impose and now enforce conditions relating to the holding company structure. More specifically, the Commission has jurisdiction over the electric utilities to have conditioned our reorganization approval on them securing the agreement of their respect holding companies. The resulting agreements are not a legislative or constitutional grant of jurisdiction over the non-public utility holding companies, however. Subject matter jurisdiction cannot be created by estoppel, waiver or unclean hands based on the agreements.

The agreements, while not conferring subject matter jurisdiction, are nevertheless binding on the holding companies. Indeed, the holding companies acknowledge that the agreements are binding and enforceable in superior court. We therefore authorize our General Counsel to file in superior court if necessary to enforce the agreements against the holding companies.

Order Instituting Investigation whether Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, and their respective holding companies, PG&E Corporation, Edison International, and Sempra Energy, respondents, have violated relevant statutes and Commission decisions, and whether changes should be made to rules, orders, and conditions pertaining to respondents' holding company systems.	Investigation 01-04-002 (Filed April 3, 2001)
In the Matter of the Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) for authorization to implement a plan of reorganization which will result in a holding company structure.	Application 87-05-007 (Filed May 6, 1987)
In the Matter of the Application of San Diego Gas & Electric Company (U 902-M) for Authorization to Implement a Plan of Reorganization Which Will Result in a Holding Company Structure.	Application 94-11-013 (Filed November 7, 1994)
In the Matter of the Application of Pacific Gas and Electric Company (U 39 M) for Authorization to Implement a Plan of Reorganization Which Will Result in a Holding Company Structure.	Application 95-10-024 (Filed October 20, 1995)
Joint Application of Pacific Enterprises, Enova Corporation, Mineral Energy Company, B Mineral Energy Sub and G Mineral Energy Sub for Approval of a Plan of Merger of Pacific Enterprises and Enova Corporation With and Into B Mineral Energy Sub ("Newco Pacific Sub") and G Mineral Energy Sub ("Newco Enova Sub"), the Wholly Owned Subsidiaries of a Newly Created Holding Company, Mineral Energy Company.	Application 96-10-038 (Filed October 30, 1996)