DGX/DUG/eap 4/27/05

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of SAN DIEGO GAS & ELECTRIC COMPANY (U 902-E) for Authority to Make Various Electric Rate Design Changes, Close Certain Rates, and Revise Cost Allocation Among Customer Classes Effective, January 1, 2006.

Application 05-02-019 (Filed February 18, 2005)

ASSIGNED COMMISSIONER AND ADMINISTRATIVE LAW JUDGE'S
SCOPING MEMO AND RULING

Pursuant to Article 2.5 of the Commission's Rules of Practice and Procedure (Rules) ¹, this Scoping Memo and Ruling addresses issues, schedule and other matters necessary to scope this proceeding.

1. Background

San Diego Gas & Electric Company (SDG&E) filed a Rate Design Window Application for authority to make various rate design changes, and to update specific marginal costs, effective January 1, 2006, pursuant to the extensions granted in letters from the Executive Director dated January 26, 2005 and October 15, 2004 and otherwise in accordance with the schedule adopted in Commission decision (D.) 89-01-040, as modified by D.02-10-039, D.95-09-020 and D.94-08-023. SDG&E identified three primary objectives for the application:

a. adjust electric revenue allocations and rates towards "cost-based levels" arguing that there is a need to reduce "cross-subsidies in the rates of non-residential customer classes."

b. provide customers "more cost-based commodity price signals" which SDG&E proposes to accomplish by transferring what it has identified as any "remaining cross-subsidies" to a new "non-bypassable charge"

c. ensure all customer classes bear responsibility for the residential subsidies mandated by Assembly Bill 1X ("AB1X"), including Community Choice Aggregation and Direct Access customers.

By Notice dated March 29, 2005, the Commission set a prehearing conference (PHC) for April 13, 2005. On April 13, 2005, the PHC was held to determine parties, create the service list, identify issues, consider the schedule, and address other matters as necessary to proceed with this application.

¹ The Commission's Rules are available on the Commission's web site, ( http://www.cpuc.ca.gov/), click on "Laws, Rules, Procedures."