BACKGROUND

With this Emergency filing, SDG&E proposes to modify, on a temporary basis, the gas transportation service level elections of its large electric generation customers, those with an average daily gas usage of 15 million cubic feet, ("Power Plants") from firm noncore service to interruptible noncore service.

SDG&E filed this Emergency Advice Letter on August 1, 2000 and requested a shortened protest period of five days, and an effective date of August 8, 2000, or as soon thereafter as reasonably possible. SDG&E requested the tariff change be temporary, from the effective date to November 1, 2000. The request for a shortened protest period was not granted.

SDG&E proposes to change its Gas Tariff Rule 14, Part I, #4, "Shortage of Gas Supply, Interruption of Delivery, and Priority of Service". The proposed change would add an additional provision to Rule 14 which would allow SDG&E to treat all electric generation customers with average daily gas usage of 15 million cubic feet per day or greater (Power Plants), as interruptible noncore transportation customers for the purposes of Rule 14.

Currently all SDG&E's noncore customers which include both the Electric Generator (EG) class and the noncore Commercial and Industrial (C&I) class, take firm service. Under Rule 14, in the event of delivery point curtailments, which occur because of system capacity constraints, interruption of service for firm noncore customers is done on a rotating block basis. To determine the order of customer rotations, customers shall be divided into two curtailment lists. One list consists of EG customers and one list consists of C&I customers. The order of customers on each list is established by a computer-generated lottery. New customers are randomly assigned a position on the appropriate list. The listed customers are then aggregated into blocks where operationally feasible. In the event firm service customers are added or deleted from the curtailment lists, the utility shall adjust the aggregation of the customer blocks as necessary.

Rule 14 states that in the event of a firm service curtailment, the utility shall curtail, in unison, that number of customer blocks, or a portion thereof, necessary to maintain service to higher priority customers. The customer blocks curtailed shall be established by selecting the first customer block from the electric generator list and the first customer block from the other firm service noncore customers.

SDG&E's proposal would have the effect of curtailing only the three major electric generation plants served by SDG&E - Encina, South Bay, and Rosarito, Mexico.

SDG&E is experiencing unprecedented gas usage on its system due, in part to high electricity market prices in California and increased gas demand by electric generators in Rosarito due to the Rosarito plant starting up on June 27, 2000. SDG&E believes it is more likely that noncore customers will be curtailed this summer than at any time during the past ten years. Under current curtailment rules, all firm service noncore customers in corresponding blocks will be curtailed simultaneously. All electric generators and commercial and industrial customers are firm service customers in San Diego. Some noncore firm customers have no alternative fuel source, while at the time of filing, both Encina and South Bay had an alternative fuel source. SDG&E indicated that Rosarito would have an alternative fuel source shortly thereafter.