XIV. Assignment of Proceeding

Commissioner John A. Bohn and Administrative Law Judge Douglas Long are assigned to this proceeding.

Findings of Fact

1. SDG&E, a California corporation, is a public utility subject to the jurisdiction of this Commission.

2. SDG&E needs external funds for the purposes set forth in the application.

3. The proposed Debt Securities and Preferred or Preference Stock are for proper purposes and not adverse to the public interest.

4. The use of credit enhancements in appropriate circumstances is not adverse to the public interest. These tools may provide SDG&E the means to better manage its cost of capital.

5. Authorizing SDG&E to determine the precise amount and timing of each debt issue, including the section of the appropriate market, specific form of approved debt financing and use of specific approved credit enhancements is not adverse to the public interest.

6. Authorizing SDG&E to encumber utility assets in the event that an encumbrance is required to secure the Debt Securities is for proper purposes and is not adverse to the public interest.

7. The Commission does not by this decision determine that the SDG&E's construction budget, cash requirements forecast, and capital structure are necessary or reasonable for ratemaking purposes. These issues are normally reviewed and authorized in general rate case or cost of capital proceedings.

8. SDG&E requests several exemptions from the Competitive Bidding Rule, similar to exemptions in D.04-01-009 and D.93-09-069.

9. Granting the exemptions from the Competitive Bidding Rule will help SDG&E issue debt on terms that are favorable to SDG&E and its ratepayers.

10. Notice of the filing of the Application appeared on the Commission's Daily Calendar of February 22, 2006. There is no known opposition to this application, and the authority requested should be granted.

Conclusions of Law

1. A public hearing is not necessary.

2. The Application should be granted to the extent set forth in the order that follows.

3. This authorization is not a finding of the value of SDG&E's stock or property, nor does it indicate approval of matters subject to review in ratemaking proceedings.

4. It is lawful to allow SDG&E authority to pledge its accounts receivable.

5. Res. F-616 allows exemption from the Competitive Bidding Rule. Certain bidding procedures and deviations from the Competitive Bidding Rule are permitted in Res. F-616.

6. SDG&E's request for the exemptions from the Competitive Bidding Rule is reasonable and should be granted.

7. SDG&E should pay the fee determined in accordance with Pub. Util. Code §§ 1904(b) and 1904.1.

8. The following order should be effective immediately.

ORDER

IT IS ORDERED that:

1. On or after the effective date of this order, San Diego Gas & Electric Company (SDG&E), may issue debt instruments, use credit enhancement tools and issue Preferred or Preference Stock upon terms and conditions consistent with those set forth or contemplated in Application 06-02-017 and as described within this decision. The additional features associated with the new Debt Securities, Preferred and Preference Stock adopted herein are also authorized for the unused authority previously granted in Commission Decisions (D.) 04-01-009 and D.93-09-069.

2. SDG&E may enter into one or more contracts for the purpose of managing interest rate risk. This authority shall not be considered as separate debt for purposes of calculating the remaining financing authorization granted by this order.

3. SDG&E's debt issues with principal amounts greater than $200 million are exempt from the requirements of the Commission's Competitive Bidding Rule.

4. SDG&E is authorized to issue securities in a manner consistent with the modifications to the Competitive Bidding Rule set forth in Resolution F-616.

5. On or before the 25th day of the month following each quarter, SDG&E shall file the reports required by General Order Series 24-B.

6. The authority granted by this order shall become effective when SDG&E pays $512,000 as required by Pub. Util. Code §§ 1904(b) and 1904.1.

7. The Application is granted as set forth above.

8. Application 06-02-017 is closed.

This order is effective today.

Dated May 11, 2006, at San Francisco, California.

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