SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report
(Date of earliest event reported): December 2, 2004
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SAN DIEGO GAS & ELECTRIC COMPANY
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(Exact name of registrant as specified in its charter)
CALIFORNIA 1-3779 95-1184800
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(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.
8330 CENTURY PARK COURT, SAN DIEGO, CALIFORNIA 92123
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619)696-2000
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(Former name or former address, if changed since last report.)
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FORM 8-K
Item 8.01 Other Events
Cost of Service Decisions
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On December 2, 2004, the California Public Utilities Commission (CPUC)
issued a decision in San Diego Gas & Electric Company's cost of service
proceeding. The decision reduces SDG&E's annual rate revenues, effective
retroactively to January 1, 2004, by approximately $23 million from the
rates in effect during 2003. Of the reduction, $10 million relates to
what SDG&E believes to be a computational error concerning its nuclear
electric rate revenues. Except for the additional $10 million reduction,
the decision essentially approves a previously reported settlement
recommended by SDG&E, the CPUC's Office of Ratepayer Advocates and most
other major parties to the proceedings. SDG&E intends to seek a
rehearing with respect to the $10 million reduction. The reduced rates
will remain in effect through 2007 subject to annual attrition
adjustments.
The CPUC also issued a decision providing that any 2005 attrition
allowance relating to the new rates will be retroactive to January 1,
2005. Attrition allowances adjust rates to reflect inflation, system
growth and operating efficiencies. Attrition allowances and performance-
based incentive mechanisms, among other items, will be addressed by the
CPUC in the Phase II proceeding, expected to be decided in the first
quarter of 2005.
Also as previously reported, during 2004 SDG&E has generally recorded
revenue and resulting net income in a manner consistent with the reduced
rates contemplated by the settlement, except for the recovery of pension
costs provided by the CPUC's decision that, when recorded, will have a
non-recurring favorable effect on net income.
Allocation of California Department of Water Resources' (DWR) Revenue
Requirement
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As previously reported, the CPUC has been deliberating the allocation of
costs incurred by the DWR in procuring power for the state's electric
utilities. On December 2, 2004, the CPUC issued a decision that would
shift $790 million of the costs to SDG&E's customers over the period
between implementation of the decision and 2013. As previously reported,
such a shift will not affect SDG&E's net income, but will adversely
affect its customer rates.
*****
The period for applications for rehearing of the decisions by the CPUC
will expire thirty days after the decisions are is mailed.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SAN DIEGO GAS & ELECTRIC COMPANY
(Registrant)
Date: December 2, 2004 By: /s/ S.D. Davis
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S.D. Davis
Sr. Vice President-External Relations
and Chief Financial Officer