EXHIBIT 99.278

         B.       ANNUAL LIMIT ON ENERGY PURCHASES OUTSIDE OF THE ISO/PX

         SDG&E will limit its energy purchases (in addition to those energy
purchases SDG&E makes under contracts already in effect as of the date of
implementation of this PBR) outside the ISO/PX to a volume that corresponds to
the relative level of direct access penetration in the SDG&E service area as
described below. Specifically, SDG&E will limit the combined megawatthours
purchased from entities other than the PX and ISO according to the equation
provided below. The applicable megawatthours for each twelve month period, will
be the simple average of (1) the "limit" calculated at the start of each twelve
month period, and (2) the "limit" calculated at the six month update.

         Limit = [(DA)(DSALoad)(1-DA)] - (DispConEngy)

Where --

         DA =     the relative direct access penetration in the SDG&E service
                  area (measured as a percentage and applied to the equation
                  pursuant to the description in the next paragraph),

         DSALoad = SDG&E's Delivery Service Area Load (measured and applied to
                  the equation pursuant to the description in the next
                  paragraph),

         DispConEngy = the amount of energy physically traded under SDG&E's
                  dispatchable resources (both generation and purchased power
                  contracts) under the control of SDG&E as defined in footnote
                  six(1) (measured and applied to the equation pursuant to the
                  description in the next paragraph).

         The direct access penetration will be set at the beginning of SDG&E's
Electric Commodity PBR using the most currently available thirty days of data
and will be updated every six months thereafter. The direct access penetration
used in the equation will be calculated as the ratio of SDG&E's Delivery Service
Area Load to SDG&E's

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(1) SDG&E's dispatchable resources currently consist solely of SDG&E's current
rights under its contracts with Public Service Company of New Mexico and
Portland General Electric Company. SDG&E's QF contracts do not currently have
provisions in them to make them a dispatchable resource and they also do not
constitute a significant amount of capacity in SDG&E's service area. To the
extent that either of these contracts is terminated, reducing dispatchable
resources available to SDG&E, this amount shall be adjusted accordingly
beginning the next calendar month after the termination.




bundled customer load. Both of these data are provided to SDG&E in the PX's
Unaccounted For Energy reports and reflect ISO settlement-quality meter data.
SDG&E's Delivery Service Area Load will be set at the beginning of SDG&E's
Electric Commodity PBR and will be updated every six months thereafter. The
quantity of load used in the equation will be that which is found for the most
recent 365 day period as reflected in the most recent Unaccounted For Energy
reports provided to SDG&E by the PX. This data reflects ISO settlement-quality
meter data. For SDG&E's dispatchable purchase power contracts, the quantity of
energy physically traded will be an annual quantity reported in the most recent
FERC Form 1, provided that, at each six month update, if the contract has
terminated, the quantity assumed for that succeeding six month period shall be
zero. Changes in the ability to transact outside the ISO and PX will be
automatic, but SDG&E will notify the Executive Director of the extent to which
changes in direct access penetration levels affect the ability to transact
outside the ISO and PX.