Attached is an Assigned Commissioner's Ruling pertaining to the
implementation of AB X1 43 and to SDG&E's previously filed application for a
Revenue Shortfall Surcharge.

Specifically, the provisions of AB X1 43 provide for freezing the energy
component of large commercial and industrial customers in SDG&E's service
territory at 6.5 cent/kWh (retroactive to February 7, 2001).  The
Commission, through a decision to be issued this Thursday (May 3rd), will
implement this frozen rate.  The bill, however, also provides the Commission
with the authority to consider the comparable energy components of rates for
comparable customer classes served by PG&E and SCE, and, if it determine it
to be in the public interest, to adjust the frozen SDG&E rate (retroactive
to Feb.7).  The ACR issued yesterday establishes procedures for the
Commission to determine if such an adjustment is appropriate.  As part of
the proceeding the Commission will also consider whether the current
voluntary bill stabilization program for large customers should be
eliminated and whether the definition of small commercial customer should be
revised.

For this phase of the proceeding (the Large Customer Phase) the Commission
has set a very expedited schedule.  Prepared Testimony is due May 11 and
hearings would be in San Diego on May 22 and 23, with a Commission decision
issued on June 28 (the complete schedule is appended to the ACR).


The ACR also addresses the small customer side of the equation.  The ruling
determines that the Commission is precluded from acting to adjust the
current 6.5 cent ceiling on the energy component of residential and small
commercial rates until it completes the statutorily mandated prudence review
of SDG&E's purchasing practices.  However, it sets forth a schedule which
will run parallel to that currently ongoing review.  The scope of that phase
of the proceeding will include whether their should be an adjustment to the
ceiling;  whether the ceiling should be made into a frozen rate; whether a
surcharge should be implemented to recover the revenue shortfall;
appropriate amortization, etc.  This phase moves on a slower track with a
commission decision to be issued at the beginning of November.

Of primary importance at this juncture is whether Enron wants/plans to
participate in the phase of the proceedings for the large customers in
SDG&E's territory, and, if so, the extent of that participation.

Jeanne Bennett







 Subject: SDG&E RATES - WOOD ACR in A.00-10-045/A.01-01-044





Assigned Commissioner Wood issued the attached ruling today.

<<22F901!.DOC>>


 - 22F901!.DOC