II. Background

SDG&E is an electric and gas corporation organized and existing under the laws of the State of California, and is primarily engaged in the business of providing public utility electric and gas service throughout San Diego County and public utility electric service in a portion of Orange County. It offers as justification that it will experience growth in the near-term and needs to serve an increasing load, improve reliability and reduce congestion costs, connect new generation, increase operational flexibility, and upgrade aging infrastructure. Additionally, SDG&E states that it plans significant capital expenditures for the Palomar Energy Center power plant in 2006 at a cost of approximately $500,000,000 and the Otay Mesa transmission project at approximately $200,000,000. Other projects in the foreseeable future include Advanced Metering Infrastructure (AMI) investments, a new major transmission line - the "Sunrise Powerlink" - that will improve the region's electrical transmission grid reliability and provide access to available and potential electricity supplies.

By Ruling dated March 14, 2006, the assigned Administrative Law Judge directed SDG&E to supplement its application and subsequently on March 30, 2006, SDG&E filed and served a supplement including a declaration by its proffered witness Hayes stating that the supplemental information is true and correct. We receive into evidence the uncontested testimony of witnesses Hayes and Lewis as served with the application and receive the supplement as further testimony by Hayes. Notice of the filing appeared on the Commission's Daily Calendar of February 22, 2006. There are no protests.