UNITED STATES

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


For the quarterly period ended	June 30, 2007


	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 incorporation or organization)	(I.R.S. Employer 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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
	Yes		No	X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
	Yes		No	X

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SDG&E FUNDING LLC
STATEMENTS OF OPERATIONS AND CHANGES IN MEMBER'S EQUITY
(In thousands of dollars)



			Three Months Ended		Six Months Ended
			June 30,		June 30,
			2007	2006	2007	2006
			(unaudited)		(unaudited)
INCOME

	Interest income		$ 643	$1,677	$1,562	$3,637
	Other income		275	275	576	566
		Total Income	918	1,952	2,138	4,203

EXPENSES

	Interest expense		753	1,787	1,783	3,858
	General and administrative		165	165	355	345
		Total Expenses	918	1,952	2,138	4,203

		NET INCOME	--	--	--	--

Member's equity at
	beginning of period		3,290	3,290	3,290	3,290
MEMBER'S EQUITY AT
	END OF PERIOD		$3,290	$3,290	$3,290	$3,290

See Notes to Financial Statements.

SDG&E FUNDING LLC
BALANCE SHEETS
(In thousands of dollars)


				June 30,		December 31,
				2007		2006
				(unaudited)
ASSETS

Current Assets:
	Cash		$	565	$	188
	Interest and other receivables			6,203		6,253
	Current portion of transition property			26,207		58,804
	Deferred financing costs			328		655
	Restricted funds			16,775		23,296
		Total Current Assets		50,078		89,196

		TOTAL ASSETS	$	50,078	$	89,196

LIABILITIES AND MEMBER'S EQUITY

Current Liabilities:
	Current portion of long-term debt		$	33,203	$	65,800
	Overcollections from SDG&E customers			13,585		20,106
		Total Current Liabilities		46,788		85,906

		Total Liabilities		46,788		85,906

Member's Equity				3,290		3,290
		TOTAL LIABILITIES AND MEMBER'S EQUITY	$	50,078	$	89,196

See Notes to Financial Statements.

SDG&E FUNDING LLC
STATEMENTS OF CASH FLOWS
(In thousands of dollars)


				Six Months Ended
				June 30,
				2007		2006
				(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income			$	--	$	--
	Adjustments to reconcile net income to net cash provided by operating activities:
		Amortization of deferred financing costs		327		327
		(Increase) decrease in interest and other receivables		50		(327	)
		Decrease in overcollections from SDG&E customers		(6,521	)	(2,151	)

	NET CASH USED BY OPERATING ACTIVITIES			(6,144	)	(2,151	)

CASH FLOWS FROM FINANCING ACTIVITIES:

	Collection of transition property from SDG&E			32,597		32,108
	Payments on long-term debt			(32,597	)	(32,108	)

	NET CASH USED BY FINANCING ACTIVITIES			--		--

CASH FLOWS FROM INVESTING ACTIVITIES:

	Decrease in restricted funds			6,521		2,151

	NET CASH PROVIDED BY INVESTING ACTIVITIES			6,521		2,151

NET INCREASE IN CASH AND CASH EQUIVALENTS				377		--
CASH AT BEGINNING OF PERIOD				188		565
CASH AT END OF PERIOD			$	565	$	565

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
	Interest payments		$	1,823	$	3,908


See Notes to Financial Statements.

SDG&E FUNDING LLC

Notes to Financial Statements

A. 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 or the company), a provider of electric and natural-gas services. SDG&E is a wholly owned subsidiary of Sempra Energy. Information in this quarterly report should be read in conjunction with SDG&E Funding LLC's Financial Statements and Notes to Financial Statements included in its 2006 Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the three months ended March 31, 2007.

Management of SDG&E Funding LLC believes that the accompanying unaudited interim financial statements reflect all adjustments that are necessary to present a fair statement of the financial position and results of operations for the interim periods. All material adjustments are of a normal, recurring nature unless otherwise disclosed in this Quarterly Report on Form 10-Q. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

SDG&E Funding LLC was organized for the limited purposes of issuing Notes, and holding and servicing Transition Property. Notes are SDG&E Funding LLC Notes, Series 1997-1, Class A-1 through Class A-7 (presented in the financial statements as Current Portion of Long-Term Debt), secured by the Transition Property and other, limited collateral. Transition Property is the right to be paid a specified amount (presented in the financial statements as Transition Property) from nonbypassable charges, frequently referred to as FTA Charges, levied on residential electric customers and small commercial electric customers of SDG&E. The nonbypassable charges were authorized by the California Public Utilities Commission 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, its federal income tax effects and its State of California franchise tax effects accrue to SDG&E.

SDG&E Funding is legally separate from SDG&E. The assets of SDG&E Funding are not available to creditors of SDG&E or Sempra Energy. SDG&E Funding will cease to exist upon the maturation or retirement of the Notes. Once the Notes have been paid in full, SDG&E will receive its initial capital contribution and any remaining funds will be returned to SDG&E's residential and small commercial customers in an action before the CPUC.

B. Early Redemption of Notes

Pursuant to the Notes' indenture dated December 16, 1997, SDG&E Funding LLC may exercise a call option, at par value, on any distribution date once the Notes' outstanding principal has been reduced to less than five percent of the initial principal balance ($32.9 million) after taking into account distributions that would otherwise be made on such distribution date. The Notes' outstanding principal will decrease to approximately $17 million, or 2.6 percent of the initial principal balance, following the third quarter payment on September 25, 2007. As of August 9, 2007, the CPUC authorized SDG&E to fund the Notes' early redemption through the use of overcollected

customer funds in the Rate Reduction Bond Memorandum Account (RRBMA) and approved SDG&E's request to eliminate the FTA charge effective October 1, 2007, following the redemption of the Notes prior to their scheduled final distribution date. Final execution of the call option will occur on September 25, 2007, the first distribution date that satisfies the call option requirements set forth in the indenture. SDG&E plans to utilize $17 million of overcollected funds in the RRBMA to fund the redemption.

Item 2. Management's Narrative Analysis of the Results of Operations

The following analysis of the financial condition and results of operations of 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 Notes 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, 2006 and in the Note Issuer's Quarterly Report on Form 10-Q for the three months ended March 31, 2007.

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 SDG&E Funding LLC Notes, Series 1997-1, Class A-1 through Class A-7 (the Notes) secured by the Transition Property and other limited collateral, and related activities. The Notes were issued pursuant to an Indenture between the Note Issuer and Bankers Trust Company of California, N.A., as trustee. The Note Issuer sold the Notes to the California Infrastructure and Economic Development Bank Special Purpose Trust SDG&E-1, a Delaware business trust (the Trust), which issued certificates corresponding to each class of the Notes in a public offering.

Operating statement effects are limited primarily to income generated from the Transition Property, interest expense on the Notes and incidental investment interest income. The Note Issuer expects to use collections with respect to the Transition Property to make scheduled principal and interest payments on the Notes, and to fund the early redemption of the Notes on September 25, 2007, as discussed in Note B of the Notes to Financial Statements herein. Interest income earned on the Transition Property is expected to offset (1) interest expense on the Notes, (2) amortization of debt-issuance expenses and the discount on the Notes, and (3) the fees charged by SDG&E for servicing the Transition Property and providing administrative services to the Note Issuer.

Collections of $12,187,000 resulted in a net undercollection for the quarter ended June 30, 2007, of $4,095,000 after deducting scheduled principal and interest payments of $16,226,000 and $56,000 for servicing fees and other expenses. Collections of $15,229,000 resulted in a net undercollection for the quarter ended June 30, 2006, of $1,765,000 after deducting scheduled principal and interest payments of $16,896,000 and $98,000 for servicing fees and other expenses.

Collections of $28,023,000 resulted in a net undercollection for the six months ended June 30, 2007, of $6,521,000 after deducting scheduled principal and interest payments of $34,421,000 and $123,000 for servicing fees and other expenses. Collections of $34,072,000 resulted in a net undercollection for the six months ended June 30, 2006, of $2,151,000 after deducting scheduled principal and interest payments of $36,017,000 and $206,000 for servicing fees and other expenses.

Item 4. Controls and Procedures

The company has designed and maintains disclosure controls and procedures to ensure that information required to be disclosed in the company's reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and is accumulated and communicated to the company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating these controls and procedures, management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives and necessarily applies judgment in evaluating the cost-benefit relationship of other possible controls and procedures.

The company evaluates the effectiveness of its internal control over financial reporting based on the framework in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, the company evaluated the effectiveness of the design and operation of the company's disclosure controls and procedures as of June 30, 2007, the end of the period covered by this report. Based on that evaluation, the company's Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in the company's internal controls over financial reporting during the company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company's internal controls over financial reporting.

PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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 June 30, 2007, delivered pursuant to the Note Indenture. It includes information relating to the collections of the FTA Charges.

Item 6. Exhibits.

Exhibits

Exhibit 31 - Section 302 Certification

31.1 Statement of Registrant's Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.

31.2 Statement of Registrant's Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.

Exhibit 32 – Section 906 Certification

32.1 Statement of Registrant's Chief Executive Officer pursuant to 18 U.S.C. Sec. 1350.

32.2 Statement of Registrant's Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350.

Exhibit 99 - Miscellaneous

99.1 Second Quarter 2007 Servicer's Certificate.

SIGNATURES

Pursuant to the requirements 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: August 13, 2007	/S/ Virginia S. Oliver

	Virginia S. Oliver Chief Financial Officer

SDG&E FUNDING LLC A DE LIMITED LIABILITY CO 10-Q