D0807046 Appendices 1-11
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COM/JB2/tcg Date of Issuance 8/1/2008

Decision 08-07-046 July 31, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of San Diego Gas & Electric Company (U902M) for authority to update its gas and electric revenue requirement and base rates effective on January 1, 2008.

Application 06-12-009

(Filed December 8, 2006)

Application of Southern California Gas Company for authority to update its gas revenue requirement and base rates effective on January 1, 2008. (U904G)

Application 06-12-010

(Filed December 8, 2006)

Order Instituting Investigation on the Commission's own motion into the rates, operations, practices, services and facilities of San Diego Gas & Electric Company and Southern California Gas Company.

Investigation 07-02-013

(Filed February 15, 2007)

(See Appendix 11 for List of Appearances.)

DECISION ON THE TEST YEAR 2008 GENERAL RATE CASES
FOR SAN DIEGO GAS & ELECTRIC COMPANY AND
SOUTHERN CALIFORNIA GAS COMPANY

Appendix 1

Settlement Agreement Regarding San Diego Gas & Electric Company Test Year 2008 Revenue Requirement

Appendix 2

Settlement Agreement Regarding Southern California Gas Company Test Year 2008 Revenue Requirement

Appendix 3

Settlement Agreement Regarding San Diego Gas & Electric Company Post-Test Year Ratemaking

Appendix 4

Settlement Agreement Regarding Southern California Gas Company Post-Test Year Ratemaking

Appendix 5

Settlement Agreement Regarding Employee Safety Incentive Measure

Appendix 6

Settlement Agreement Regarding Utility Workers Union of America, Local 132 Issues

Appendix 7

Six Year Leadership Agreement

Appendix 8

Settlement Agreement Regarding Local 483 Issues

Appendix 9

Memorandum of Understanding

Appendix 10

Memorandum of Understanding

Appendix 11

Service List

DECISION ON THE TEST YEAR 2008 GENERAL RATE CASES
FOR SAN DIEGO GAS & ELECTRIC COMPANY AND
SOUTHERN CALIFORNIA GAS COMPANY

1. Summary

San Diego Gas & Electric Company (SDG&E) filed Application (A.) 06-12-009, a general rate case (GRC) application, and Southern California Gas Company (SoCalGas) filed A.06-12-010, also a GRC application. They are related companies with some shared services. This decision adopts for each company a Test Year 2008 revenue requirement, a mechanism for attrition adjustments until the next GRC, and performance and safety incentive mechanisms, which are reasonable and necessary to provide safe and reliable service to ratepayers.

The Test Year 2008 settlements adopted in this decision provide a gas and electric revenue requirement of $1.361 billion for SDG&E and a gas revenue requirement of $1.685 billion for SoCalGas.

Compared to SDG&E's 2007 authorized revenue requirements, this is an increase of $150 million (12.4%), in 2008, with further Post-Test Year increases for 2009 through 2011 of $41 million (3.0%), $44 million (3.1%), and $44 million (3.0%), respectively.

For SoCalGas, this is an increase of $59 million (3.6%), in 2008, with further Post-Test Year increases for 2009 through 2011 of $52 million (3.1%), $50 million (2.9%), and $53 million (3.0%), respectively.

The initial requests by SDG&E and SoCalGas were Test Year 2008 revenue requirements of $1.425 billion for SDG&E, and $1.785 billion for SoCalGas, with further increases in the subsequent five years of a proposed six-year rate cycle. The test year and post-test year settlement agreements adopted here reduced the total requested revenues by $164 million for 2008 and $213 million over the four-year rate cycle as adopted herein.

The decision requires SDG&E and SoCalGas to file another rate case for Test Year 2012 and it allows the filing of a single combined application with separate revenue requirements for each company. This decision adopts eight settlements, and rejects two others, pursuant to Rule 12 et seq., between applicants and various parties which, in total, resolve nearly all contested issues.

The adopted settlements were not all-party settlements and therefore this decision resolves all objections to those settlements, with any reasonable and necessary modifications. The adopted settlements are:

1. Settlement Agreement Regarding San Diego Gas & Electric Company Test Year 2008 Revenue Requirement with the Division of Ratepayer Advocates (DRA);

2. Settlement Agreement Regarding Southern California Gas Company Test Year 2008 Revenue Requirement with DRA and The Utility Reform Network (TURN);

3. Settlement Agreement Regarding San Diego Gas & Electric Company Post-Test Year Ratemaking with DRA, TURN and the Aglet Consumer Alliance (Aglet);

4. Settlement Agreement Regarding Southern California Gas Company Post-Test Year Ratemaking DRA, TURN and Aglet;

5. Settlement Agreement Regarding Employee Safety Incentive Measure for SDG&E with Coalition of California Utility Employees;

6. Settlement Agreement Regarding Utility Workers Union of America, Local 132 Issues - A Safety Incentive for SoCalGas;

7. Settlement Agreement with Pest Control Operators - Tariff Rules for SDG&E and SoCalGas; and

8. Settlement Agreement with Disability Rights Advocates - Accessibility issues for SDG&E.

This decision rejects two other proposed settlements that are not in the public interest, and not reasonable, based on the record of the proceeding:

9. Six Year Leadership Agreement with the Greenlining Institute - on Corporate Philanthropy and Diversity of SDG&E and SoCalGas, with The Greenlining Institute, and

10. Settlement Agreement Regarding Local 483 Issues - for SoCalGas.

This decision also resolves the remaining contested issues addressing various incentive mechanisms on safety and reliability. Finally, this decision finds that the effective date for the change in revenue requirement is January 1, 2008, which resolves the one issue identified in Decision  07-12-053. These proceedings are closed.

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