Assignment of Proceeding

Geoffrey F. Brown is the Assigned Commissioner and Douglas M. Long is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. The Commission did not adopt a specific ratemaking forecast for the SONGS costs billed by Edison to SDG&E in D.04-07-022, the Edison general rate case where the forecast was litigated. SDG&E's Ex. 169 does not persuasively demonstrate the correct forecast for SDG&E's share of SONGS costs.

2. D.04-12-015, which adopted SDG&E's test year 2004 revenue requirement, omitted an allowance for Results Sharing costs in the SONGS costs billed by Edison to SDG&E. After correcting SDG&E's forecast for the adjustment made to Edison's forecast in D.04-07-022, the correct forecast is $2.179 million that should have been included in test year revenue requirements.

3. SDG&E did not demonstrate that the test year allowance in D.04-12-015 incorrectly calculated an allowance for Internal Market Mechanism costs.

4. D.04-12-015 omitted an allowance for PBOPs costs in the SONGS costs billed by Edison to SDG&E. The correct forecast is $0.683 million that should have been included in test year revenue requirements.

5. D.04-12-015 omitted an allowance for Contractual Overheads in the SONGS costs billed by Edison to SDG&E. The correct forecast is $2.538 million that should have been included in test year revenue requirements.

6. SDG&E demonstrated that the test year allowance incorrectly calculated an allowance for escalation.

7. The attrition year revenue requirement for 2005 should be adjusted to reflect the shortfall as a result of the stated omissions in the test year 2004 revenue requirement.

Conclusions of Law

1. Exs. 261, 408 and 414, from A.02-05-004, can be received in evidence by reference pursuant to Rule 72.

2. SDG&E provided persuasive evidence that the allowance for Results Sharing costs in the SONGS costs billed by Edison to SDG&E was omitted from D.04-12-015.

3. SDG&E provided persuasive evidence that an allowance for PBOPs costs in the SONGS costs billed by Edison to SDG&E was omitted from D.04-12-015.

4. SDG&E provided persuasive evidence that an allowance for Contractual Overheads costs in the SONGS costs billed by Edison to SDG&E was omitted from D.04-12-015.

5. SDG&E provided persuasive evidence that escalation was calculated incorrectly in D. 04-12-015.

6. SDG&E failed to provide persuasive evidence that there were any other omissions or errors in D.04-12-015 that should be rectified on rehearing.

ORDER

IT IS ORDERED that:

1. On rehearing of Decision (D.) 04-12-015, San Diego Gas & Electric Company (SDG&E) is authorized to recover an additional $6.524 million in test year 2004 expenses.

2. SDG&E is authorized to recover the corresponding adjustment to revenue requirement for attrition year 2005.

3. SDG&E shall file an advice letter, with supporting work papers, to recover the under-collected revenue requirement in its base margin revenue requirement for 2004 and 2005. The advice letter will be effective on the date filed subject to Energy Division determining that the filings are in compliance with this order.

4. Phase 3 of this proceeding is concluded.

5. Applications (A.) 02-12-027, A.02-12-028, and Investigation 03-03-016 are closed.

This order is effective today.

Dated June 15, 2006, at San Francisco, California.

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