SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN
GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND
IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT
(Mark One)
[..X..] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 30, 1998
For the quarterly period ended...........................
Or
[.....] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________ to _____________
Commission File No. 333-30761
CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK SPECIAL PURPOSE TRUST SDG&E-1
(Issuer of the Certificates)
SDG&E FUNDING LLC
(Exact Name Of Registrant As Specified In
Its Certificate Of Formation)
Delaware 95-1184800
- -------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Ash Street, Room 111,
San Diego, California 92101
- -------------------------------------------------------------------
(Address of principal executive offices (Zip code)
Registrant's telephone number, including area code: (619)696-2328
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes...X... No......
PART I
Item 1. Financial Statements
<TABLE>
SDG&E FUNDING LLC
STATEMENT OF OPERATIONS AND CHANGES IN MEMBER'S EQUITY (Unaudited)
(In thousands of dollars)
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1998
------------------ -------------------
<S> <C> <C>
INCOME
- ------
Interest income $ 9,652 $31,381
Other income 273 828
------ ------
Total Income 9,925 32,209
------ ------
EXPENSES
- --------
Interest expense 9,760 31,730
Amortization of deferred financing 164 479
costs
Other expenses 1 3
------ ------
Total Expenses 9,925 32,212
------ ------
NET LOSS 0 (3)
Member's equity, beginning of period 3,290 3,293
------ ------
MEMBER'S EQUITY AT SEPTEMBER 30, 1998 $ 3,290 $ 3,290
====== ======
See notes to financial statements.
</TABLE>
<TABLE>
SDG&E FUNDING LLC
BALANCE SHEET
(In thousands of dollars)
<CAPTION>
September 30, December 31,
1998 1997
(Unaudited)
------------- ------------
<S> <C> <C>
ASSETS
- -------
Current Assets:
Cash and cash equivalents $ 565 $ 2,427
Interest receivable -- 8
Current portion of
transition property 65,800 65,800
--------- ---------
Total Current Assets 66,365 68,235
Noncurrent Assets:
Transition property 542,894 585,204
Deferred financing costs 6,066 4,920
Restricted funds 7,390 3,190
--------- ---------
TOTAL ASSETS $ 622,715 $ 661,549
========= =========
LIABILITIES AND MEMBER'S EQUITY
- -------------------------------
Current Liabilities:
Current portion of
long-term debt $ 65,800 $ 65,800
Accounts payable and
accrued expenses 3,735 256
--------- ---------
Total Current Liabilities 69,535 66,056
Long-term debt 549,890 592,200
--------- ---------
Total Liabilities 619,425 658,256
Member's Equity 3,290 3,293
--------- ---------
TOTAL LIABILITIES AND
MEMBER'S EQUITY $ 622,715 $ 661,549
========= =========
See notes to financial statements.
</TABLE>
<TABLE>
SDG&E FUNDING LLC
STATEMENT OF CASH FLOWS (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(In thousands of dollars)
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net Loss $ (3)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization of deferred financing costs 479
Decrease in interest receivable 8
Increase in accounts payable and
accrued expenses 3,479
------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,963
------
CASH FLOWS FROM FINANCING ACTIVITIES:
Collection of transition property from SDG&E 42,310
Payments on long-term debt (42,310)
Incurrence of deferred financing costs (1,625)
Increase in restricted funds (4,200)
-------
NET CASH USED BY FINANCING ACTIVITIES (5,825)
-------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,862)
CASH AND CASH EQUIVALENTS AT DECEMBER 31, 1997 2,427
-------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30, 1998 $ 565
========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments $31,202
=======
See notes to financial statements.
</TABLE>
Notes to Financial Statements
- -----------------------------
1. Basis of Presentation
This Quarterly Report on Form 10-Q includes the financial
statements of SDG&E Funding LLC, a Delaware special-purpose
limited-liability company, whose sole member is San Diego Gas &
Electric Company (SDG&E), a provider of electric and natural-gas
services. SDG&E is a wholly owned subsidiary of Enova
Corporation. This quarterly report should be read in conjunction
with SDG&E Funding LLC's Financial Statements and Notes to
Financial Statements included in its 1997 Annual Report on Form
10-K and its Quarterly Reports on 10-Q for the three months ended
March 31, 1998 and for the three months ended June 30, 1998.
SDG&E Funding LLC believes that the accompanying statements
reflect all adjustments that are necessary to present a fair
statement of the financial position and results of operations for
the interim period. All material adjustments are of a normal,
recurring nature unless otherwise disclosed in this Form 10-Q.
Results of operations for interim periods are not necessarily
indicative of results to be expected for a full year.
SDG&E Funding LLC was organized for the limited purposes of
issuing Notes and holding and servicing the Transition Property.
Transition Property is the right to be paid a specified amount
(presented in the financial statements as "Transition Property")
from a nonbypassable charge levied on residential electric
customers and small commercial electric customers. The
nonbypassable charge was authorized by the California Public
Utilities Commission (CPUC) pursuant to the electric industry
restructuring mandated by California Assembly Bill 1890, as
amended by California Senate Bill 477.
Since SDG&E Funding LLC is a single-member, limited- liability
company, all of its federal income tax effects and its material
State of California franchise tax effects accrue to SDG&E.
2. Voter Initiative
As previously discussed under the caption "RECENT DEVELOPMENTS_VOTER
INITIATIVE" in the Prospectus Supplement dated December 4, 1997 (the
"Prospectus") for the California Infrastructure and Economic
Development Bank Special Purpose Trust SDG&E-1, Rate Reduction
Certificates, Series 1997-1 (the "Certificates"), certain California
groups had previously submitted to the California State Attorney
General a proposed ballot initiative (the "Voter Initiative")
relating to the Certificates, which were issued in December 1997.
In June 1998 a coalition of consumer groups received verification
that its Voter Initiative received the needed signatures to qualify
for the November 3, 1998 California ballot. The Voter Initiative
seeks to amend or repeal Assembly Bill 1890, Chapter 854, California
Statutes of 1996 (as amended, the "Statute") in various respects,
including requiring utilities to provide a 10% reduction in
electricity rates charged to residential and small commercial
customers in addition to the 10% rate reduction that was effect as of
January 1, 1998. Among other things, the Voter Initiative would
prohibit a utility from collecting the separate nonbypassable charges
payable by residential and small commercial customers (the "FTA
Charges") for the payment of rate reduction bonds, such as the
Certificates or, if such a prohibition were found to be unenforceable
by a court of competent jurisdiction, require the utility to offset
any such FTA Charge by crediting back to the customer the amount of
such charge. In addition, the Voter Initiative states that "any
underwriter or bond purchaser who purchases rate reduction bonds
after November 15, 1997. . . shall be deemed to have notice of the
[Voter Initiative]."
As stated in the Prospectus Supplement under the caption "RECENT
DEVELOPMENTS - VOTER INITIATIVE," and in the Prospectus dated
December 4, 1997 for the Certificates under the caption "RISK FACTORS
- - Unusual Nature of the Transition Property - Possible State
Amendment or Repeal of the Statute and Related Litigation," in
connection with the issuance of the Certificates, Brown & Wood LLP
provided an opinion that, under applicable United States and State of
California constitutional principles relating to the impairment of
contracts, the State of California could not repeal or amend the
Statute (by way of legislative process or California voter
initiative) if such repeal or amendment would substantially impair
the rights of the Certificateholders, absent a demonstration by the
State of California of a "great public calamity" that justifies a
contractual impairment. There have been numerous cases in which
legislative or popular concerns with the burden of taxation or
government charges have led to adoption of legislation reducing or
eliminating taxes or charges which supported bonds or other
contractual obligations entered into by public instrumentalities.
However, such concerns have not been considered by the courts to
provide sufficient justification for a substantial impairment of the
security for such bonds or obligations provided by the taxes or
governmental charges involved. Brown & Wood LLP opined further in
connection with the issuance of the Certificates that knowledge of
the pendency of a proposed voter initiative by prospective
Certificateholders should not diminish the protection afforded by the
contracts clause of the United States Constitution (and, by analogy,
the Constitution of the State of California). The opinions of Brown
& Wood LLP were based upon analogous case law; none of such cases
addresses these particular circumstances directly. The opinions of
Brown & Wood LLP have not been reissued since the Certificates were
issued and do not constitute a guarantee of the outcome of any
particular litigation.
The passage of the Voter Initiative could have a material adverse
effect on the secondary market for the Certificates, including the
price and liquidity thereof. If the Voter Initiative (also known as
Proposition 9) is approved by the voters, SDG&E and the other
California investor-owned utilities (IOUs) have stated in a letter to
SDG&E Funding LLC and the corresponding affiliates of the other IOUs,
respectively, their intentions to comply with their obligations under
section 5.02(d) of the Transition Property Servicing Agreement by
"tak[ing] such legal or administrative actions...as may be reasonably
necessary to block or overturn any attempts to cause a repeal of,
modification of or supplement to the Statute or the Financing Order
or the rights of holders of Transition Property by legislative
enactment, voter initiative or constitutional amendment that would be
adverse to Certificateholders." Accordingly, if the Voter Initiative
is approved by the voters, SDG&E intends to commence litigation
immediately to cause section 840.1 (the section of California law
that would result from the passage of the Voter Initiative) declared
unconstitutional. If the Voter Initiative is voted into law and is
not immediately overturned or is not stayed pending judicial review
of its merits, the collection of charges necessary to pay the
Certificates while the litigation is pending could be precluded,
which would adversely affect the Certificates, the secondary market
for the Certificates, including the pricing and liquidity thereof,
the dates of maturity thereof, and accordingly the weighted average
lives thereof. In addition, if the Voter Initiative were to be voted
into law and be upheld by the courts, it could have a further
material adverse effect on the Certificates, the secondary market for
the Certificates, including the pricing and liquidity thereof, the
dates of maturity thereof, and the weighted average lives thereof,
and the holders of the Certificates could incur a loss on their
investment.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The following analysis of the financial condition and results of
operations for SDG&E Funding LLC (the Note Issuer) is in an
abbreviated format pursuant to Instruction H of Form 10-Q. Such
analysis should be read in conjunction with the Financial Statements
and Note to Financial Statements included in Item 1, above, and the
Financial Statements and Notes to Financial Statements included in
the Note Issuer's Annual Report on Form 10-K for the year ended
December 31, 1997 and the Note Issuer's Quarterly Reports on Form
10-Q for the three months ended March 31, 1998 and for the three
months ended June 30, 1998.
The Note Issuer is limited by its organizational documents to
engaging in the activities of owning certain property created
pursuant to the California Public Utilities Code (the "Transition
Property") and issuing notes secured by the Transition Property and
other limited collateral, and related activities. Accordingly,
operating-statement effects were limited primarily to income
generated from the Transition Property, interest expense on the SDG&E
Funding LLC Notes, Series 1997-1, Class A-1 through Class A-7 (the
"Notes"), and incidental investment interest income. The Note
Issuer's primary operating expense is servicing fees payable to
SDG&E. Offsetting this expense are the investment earnings on the
monthly remittances from SDG&E. The investment earnings are not
expected to fully offset servicing expenses payable to SDG&E.
During the three- and nine-month periods ended September 30, 1998 the
income generated from the Transition Property was $10 million and $32
million, respectively. Interest expense of $10 million and $32
million, respectively, relates to interest on the Notes and the
amortization of debt-issuance costs.
Collections of FTA Charges are currently meeting expectations and
were sufficient to pay all scheduled payments on the Notes and
related expenses for the Note payment due September 25, 1998. For the
third quarter of 1998 collections of approximately $32,018,000
resulted in a surplus of approximately $1,172,000 after deducting
scheduled principal and interest payments of approximately
$30,302,000, payments of approximately $460,000 for servicing fees
and other expenses, and approximately $82,000 retained to fund the
Overcollateralization Account established under the Notes' indenture.
This surplus will be applied toward future payments on the Notes. The
FTA Charges will be adjusted at least annually if there is a material
shortfall or overage in collections. Management expects future
collections of FTA Charges to be sufficient to cover expenses and to
make scheduled payments on the Notes on a timely basis.
The Note Issuer has no computer systems of its own and relies on
certain systems of SDG&E for information. While there is the
potential for SDG&E's systems to be unable to recognize the year
2000, SDG&E is in the process of an extensive evaluation of its
computer systems and an enterprise-wide date-conversion project. For
additional information on SDG&E's Year 2000 project, see SDG&E's
Quarterly Report on Form 10-Q for the three months ended September
30, 1998.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable to the Note Issuer or the Trust.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
See Note 2 regarding the Voter Initiative.
Item 5. Other Information.
Attached, with respect to the Note Issuer and the Trust, as Exhibit
99.1 is the Quarterly Servicer's Certificate for the quarter ended
September 30, 1998 delivered pursuant to the Note Indenture. It
includes information relating to the collections of the nonbypassable
charges (the "FTA Charges") payable by residential electric customers
and small commercial electric customers.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
3.1 Certificate of Formation (1)
3.2 Limited Liability Company Agreement (1)
3.3 Amended and Restated Limited Liability Company
Agreement (1)
4.1 Note Indenture (2)
4.2 Amended and Restated Declaration and Agreement
of Trust (1)
4.3 Series Supplement (2)
4.4 Form of Note (1)
4.5 First Supplement Trust Agreement (2)
4.6 Form of Rate Reduction Certificate (2)
10.1 Transition Property Purchase and Sale Agreement (2)
10.2 Transition Property Servicing Agreement (2)
10.3 Note Purchase Agreement (2)
10.4 Fee and Indemnity Agreement (2)
27.1 Financial Data Schedule for the quarter ended
September 30, 1998
99.1 Quarterly Servicer's Certificate dated September 25, 1998
- -------------------------
(1) Incorporated by reference to the same-titled exhibit to the Note
Issuer and Trust's Registration Statement on Form S-3, as
amended, File No. 333-30761.
(2) Incorporated by reference to the same-titled exhibit to the Note
Issuer and Trust's Current Report on Form 8-K filed with the
Commission on December 23, 1997.
- -------------------------
(b) Reports on Form 8-K:
A Current Report on Form 8-K was filed on July 8, 1998 to
announce the completion of the merger between Pacific
Enterprises and Enova Corporation, parent of SDG&E, and to
announce the qualification of the Voter Initiative for the
November 1998 ballot.
A Current Report on Form 8-K was filed on July 27, 1998 to
announce the California Supreme Court denial of a petition to
remove the Voter Initiative from the November ballot.
A Current Report on Form 8-K was filed on October 6, 1998 to
reaffirm certain commitments relative to SDG&E Funding LLC
regarding the Voter Initiative.
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) 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.
SDG&E Funding LLC,
as Registrant
Date: October 30, 1998 By: /s/ James P. Trent
-----------------------------
James P. Trent
Chief Financial Officer and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 565
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 66,365
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 622,715
<CURRENT-LIABILITIES> 69,535
<BONDS> 549,890
0 <F1>
0 <F1>
<COMMON> 0 <F1>
<OTHER-SE> 3,290 <F1>
<TOTAL-LIABILITY-AND-EQUITY> 622,715
<SALES> 0
<TOTAL-REVENUES> 32,209
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 482
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,730
<INCOME-PRETAX> (3)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3)
<EPS-PRIMARY> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> NO COMMON OR PREFERRED SHARES ISSUED AND OUTSTANDING.
EQUITY = MEMBER'S EQUITY
</TABLE>
Quarterly Servicer's Certificate
California Infrastructure and Economic Development Bank Special
Purpose Trust SDG&E-1
$658,000,000 Rate Reduction Certificates, Series 1997-1
Pursuant to Section 4.01(d)(ii) of the Transition Property Servicing
Agreement dated as of December 16, 1997 (the "Agreement") between
San Diego Gas & Electric Company, as Servicer, and SDG&E Funding
LLC, as Note Issuer, the Servicer does hereby certify as follows:
Capitalized terms used in the Quarterly Servicer's Certificate (the
"Quarterly Certificate") have their respective meanings as set forth
in the Agreement. References herein to certain section and
subsections are references to the respective sections of the
Agreement.
Collection Periods: Jul-98 through Sep-98
Distribution Date: 25-Sep-98
<TABLE>
1. COLLECTIONS ALLOCABLE AND AGGREGATE AMOUNTS AVAILABLE FOR THE
CURRENT DISTRIBUTION DATE:
<S> <C> <C>
i. Remittances for the first Collection Period Jul-98 $ 9,855,785.73
ii. Remittances for the second Collection Period Aug-98 $10,479,302.46
iii. Remittances for the third Collection Period Sep-98 $11,682,455.77
iv. Net Earnings on Collection Account $246,521.95
v. General Sub-Account Balance $32,264,065.91
vi. Reserve Sub-Account Balance $2,782,001.41
vii. Overcollateralization Sub-Account Balance $164,500.00
viii. Capital Sub-Account Balance $3,190,000.00
ix. Collection Account Balance $38,400,567.32
2. OUTSTANDING PRINCIPAL BALANCE AND COLLECTION ACCOUNT BALANCE
AS OF PRIOR DISTRIBUTION DATE:
i. Class A-1 Principal Balance $43,932,681.18
ii. Class A-2 Principal Balance $82,639,254.00
iii. Class A-3 Principal Balance $66,230,948.00
iv. Class A-4 Principal Balance $65,671,451.00
v. Class A-5 Principal Balance $96,537,839.00
vi. Class A-6 Principal Balance $197,584,137.00
vii. Class A-7 Principal Balance $83,536,371.00
viii. Rate Reduction Certificate Principal Balance $636,132,681.18
ix. Reserve Sub-Account Balance $2,782,001.41
x. Overcollateralization Sub-Account Balance $164,500.00
xi. Capital Sub-Account Balance $3,190,000.00
3. REQUIRED FUNDING/PAYMENTS AS OF CURRENT DISTRIBUTION DATE:
i. Scheduled Class A-1 Certificate Principal Balance $23,489,759.73
ii. Scheduled Class A-2 Certificate Principal Balance $82,639,254.00
iii. Scheduled Class A-3 Certificate Principal Balance $66,230,948.00
iv. Scheduled Class A-4 Certificate Principal Balance $65,671,451.00
v. Scheduled Class A-5 Certificate Principal Balance $96,537,839.00
vi. Scheduled Class A-6 Certificate Principal Balance $197,584,137.00
vii. Scheduled Class A-7 Certificate Principal Balance $83,536,371.00
viii. Scheduled Class A Certificate Principal Balance $615,689,759.73
ix. Required Class A-1 Coupon Payment $655,695.27
x. Required Class A-2 Coupon Payment $1,247,852.74
xi. Required Class A-3 Coupon Payment $1,005,054.64
xii. Required Class A-4 Coupon Payment $1,009,698.56
xiii. Required Class A-5 Coupon Payment $1,493,923.06
xiv. Required Class A-6 Coupon Payment $3,116,889.76
xv. Required Class A-7 Coupon Payment $1,330,316.71
xvi. Required Overcollateralization Funding $82,250.00
xvii. Required Capital Sub-Account Funding $0.00
4. ALLOCATION OF REMITTANCES AS OF CURRENT DISTRIBUTION DATE
PURSUANT TO 8.02(d)OF INDENTURE:
i. Note Trustee, Delaware Trustee
and Certificate Trustee Fees $1,283.33
ii. Quarterly Servicing Fee $397,582.93
iii. Quarterly Administration Fee $25,000.00
iv. Operating Expenses (subject to $100,000 cap) $37,505.25
v. Quarterly Interest
1. Class A-1 Certificate Coupon Payment $655,695.27
2. Class A-2 Certificate Coupon Payment $1,247,852.74
3. Class A-3 Certificate Coupon Payment $1,005,054.64
4. Class A-4 Certificate Coupon Payment $1,009,698.56
5. Class A-5 Certificate Coupon Payment $1,493,923.06
6. Class A-6 Certificate Coupon Payment $3,116,889.76
7. Class A-7 Certificate Coupon Payment $1,330,316.71
vi. Principal Due and Payable as a Result of Event
of Default or on Final Maturity Date $0.00
vii. Quarterly Principal
1. Class A-1 Certificate Principal Payment $20,442,921.45
2. Class A-2 Certificate Principal Payment $0.00
3. Class A-3 Certificate Principal Payment $0.00
4. Class A-4 Certificate Principal Payment $0.00
5. Class A-5 Certificate Principal Payment $0.00
6. Class A-6 Certificate Principal Payment $0.00
7. Class A-7 Certificate Principal Payment $0.00
viii. Operating Expenses (in excess of $100,000) $0.00
ix. Funding of Overcollateralization Sub-Account
(to required level) $82,250.00
x. Funding of Capital Sub-Account (to required level) $0.00
xi. Net Earnings Released to Note Issuer $246,521.95
xii. Released to Note Issuer upon Series Retirement:
Overcollateralization Sub-Account $0.00
xiii. Released to Note Issuer upon Series Retirement:
Capital Sub-Account $0.00
xiv. Deposits to Reserve Sub-Account $1,171,570.26
xv. Released to Note Issuer upon Series Retirement:
Collection Account $0.00
5. OUTSTANDING PRINCIPAL BALANCE AND COLLECTION ACCOUNT BALANCE AS
OF CURRENT DISTRIBUTION DATE (after giving effect to payments to
be made on such distribution date):
i. Class A-1 Principal Balance $23,489,759.73
ii. Class A-2 Principal Balance $82,639,254.00
iii. Class A-3 Principal Balance $66,230,948.00
iv. Class A-4 Principal Balance $65,671,451.00
v. Class A-5 Principal Balance $96,537,839.00
vi. Class A-6 Principal Balance $197,584,137.00
vii. Class A-7 Principal Balance $83,536,371.00
viii. Rate Reduction Certificate Principal Balance $615,689,759.73
ix. Reserve Sub-Account Balance $3,953,571.67
x. Overcollateralization Sub-Account Balance $246,750.00
xi. Capital Sub-Account Balance $3,190,000.00
6. SUB-ACCOUNT DRAWS AS OF CURRENT DISTRIBUTION DATE(if
applicable, pursuant to Section 8.02(e)of Indenture):
i. Reserve Sub-Account $0.00
ii. Overcollateralization Sub-Account $0.00
iii. Capital Sub-Account $0.00
iv. Total Draws $0.00
7. SHORTFALLS IN INTEREST AND PRINCIPAL PAYMENTS AS OF CURRENT
DISTRIBUTION DATE:
i. Quarterly Interest
1. Class A-1 Certificate Coupon Payment $0.00
2. Class A-2 Certificate Coupon Payment $0.00
3. Class A-3 Certificate Coupon Payment $0.00
4. Class A-4 Certificate Coupon Payment $0.00
5. Class A-5 Certificate Coupon Payment $0.00
6. Class A-6 Certificate Coupon Payment $0.00
7. Class A-7 Certificate Coupon Payment $0.00
ii. Quarterly Principal
1. Class A-1 Certificate Principal Payment $0.00
2. Class A-2 Certificate Principal Payment $0.00
3. Class A-3 Certificate Principal Payment $0.00
4. Class A-4 Certificate Principal Payment $0.00
5. Class A-5 Certificate Principal Payment $0.00
6. Class A-6 Certificate Principal Payment $0.00
7. Class A-7 Certificate Principal Payment $0.00
8. SHORTFALLS IN REQUIRED SUB-ACCOUNT LEVELS AS OF CURRENT
DISTRIBUTION DATE:
i. Overcollateralization Sub-Account $0.00
ii. Capital Sub-Account $0.00
</TABLE>
<TABLE>
9. DISTRIBUTIONS OF PRINCIPAL PER $1,000 OF ORIGINAL PRINCIPAL AMOUNT:
<S> <C> <C> <C>
Principal per $1,000
Original Principal Principal Payment of Original Principal
(A) (B) (B/A*1000)
i. Class A-1 $65,800,000.00 $20,442,921.45 $310.682697
ii. Class A-2 $82,639,254.00 $0.00 $0.000000
iii. Class A-3 $66,230,948.00 $0.00 $0.000000
iv. Class A-4 $65,671,451.00 $0.00 $0.000000
v. Class A-5 $96,537,839.00 $0.00 $0.000000
vi. Class A-6 $197,584,137.00 $0.00 $0.000000
vii. Class A-7 $83,536,371.00 $0.00 $0.000000
10. DISTRIBUTIONS OF INTEREST PER $1,000 OF ORIGINAL PRINCIPAL AMOUNT:
Interest per $1,000
Original Principal Interest Payment of Original Principal
(A) (B) (B/A*1000)
i. Class A-1 $65,800,000.00 $655,695.27 $9.964974
ii. Class A-2 $82,639,254.00 $1,247,852.74 $15.100000
iii. Class A-3 $66,230,948.00 $1,005,054.64 $15.175000
iv. Class A-4 $65,671,451.00 $1,009,698.56 $15.375000
v. Class A-5 $96,537,839.00 $1,493,923.06 $15.475000
vi. Class A-6 $197,584,137.00 $3,116,889.76 $15.775000
vii. Class A-7 $83,536,371.00 $1,330,316.71 $15.925000
</TABLE>
IN WITNESS HEREOF, the undersigned has duly executed and delivered
this Quarterly Servicer's Certificate this 25th day of Sept, 1998.
SAN DIEGO GAS & ELECTRIC COMPANY, as Servicer
by: /s/ James P. Trent
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title: Manager, Accounting Operations
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