SECURITIES AND EXCHANGE COMMISSION  
 
                            WASHINGTON, D.C. 20549  
 
                                  FORM 10-Q  
(Mark One)  
  
[..X..]  Quarterly report pursuant to Section 13 or 15(d) of the  
         Securities Exchange Act of 1934  
                                               June 30, 1997     
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 _________________ 
 
               Name of                                                 
Commission     Registrant                             IRS Employer     
File           as specified        State of           Identification   
Number         in its charter      Incorporation      Number           
----------     --------------      --------------     --------------   
1-11439        ENOVA CORPORATION     California       33-0643023        
                                                                        
1-3779         SAN DIEGO GAS &                                         
               ELECTRIC COMPANY      California       95-1184800        
 
                                                                    
101 ASH STREET, SAN DIEGO, CALIFORNIA                           92101   
----------------------------------------                     ---------- 
(Address of principal executive offices)                     (Zip Code) 
                                                                        
 
Registrants' telephone number, including area code    (619) 696-2000    
                                                    ------------------- 
                                  No Change                             
----------------------------------------------------------------------- 
Former name, former address and former fiscal year, if changed since  
last report 
  
     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 the number of shares outstanding of each of the issuer's  
classes of common stock, as of the latest practicable date.  
 
Common Stock outstanding June 30, 1997:                                 
 
Enova Corporation                                        113,616,714    
                                                         ----------- 
San Diego Gas & Electric Company      Wholly owned by Enova Corporation 
 
 
 
 
                             ENOVA CORPORATION 
 
                                    AND 
 
                      SAN DIEGO GAS & ELECTRIC COMPANY 
 
 
 
                                  CONTENTS 
 
                                         										Page No. 
                                                  -------- 
PART I.	FINANCIAL INFORMATION 
 
		Statements of Income. . . . . . . . . . . . . . . . 3 
		Balance Sheets. . . . . . . . . . . . . . . . . . . 5 
		Statements of Cash Flows. . . . . . . . . . . . . . 6 
		Notes to Financial Statements . . . . . . . . . . . 7 
 
Item 2.	Management's Discussion and Analysis of 
		Financial Condition and Results of Operations . . .11 
 
 
PART II.	OTHER INFORMATION 
 
Item 1.	Legal Proceedings . . . . . . . . . . . . . .18 
 
Item 6.	Exhibits and Reports on Form 8-K. . . . . . .18 
 
Signature . . . . . . . . . . . . . . . . . . . . . .19 
 
 
 
 
<TABLE> 
STATEMENTS OF INCOME (unaudited) 
In thousands except per share amounts 
<CAPTION> 
                                          Enova Corporation 
                                          and Subsidiaries             SDG&E 
                                       ----------------------   ------------------ 
For the three months ended June 30,          1997       1996      1997       1996 
                                       -------------------------------------------- 
<S>                                        <C>        <C>       <C>        <C> 
Operating Revenues 
  Electric                                 $417,040   $376,971  $417,040   $376,971 
  Gas                                        74,852     81,250    74,852     81,250 
  Other                                       9,589     12,746      --         --   
                                       -------------------------------------------- 
      Total operating revenues              501,481    470,967   491,892    458,221 
                                       -------------------------------------------- 
Operating Expenses 
  Electric fuel                              38,741     25,580    38,741     25,580 
  Purchased power                            89,018     76,525    89,018     76,525 
  Gas purchased for resale                   22,752     33,689    22,752     33,388 
  Maintenance                                21,389     16,839    21,389     16,839 
  Depreciation and decommissioning           86,174     92,741    80,506     87,990 
  Property and other taxes                   11,046     11,377    11,046     11,377 
  General and administrative                 51,245     52,294    50,181     49,190 
  Other                                      53,359     50,423    40,896     38,601 
  Income taxes                               42,517     36,974    59,141     48,889 
                                       -------------------------------------------- 
      Total operating expenses              416,241    396,442   413,670    388,379 
                                       -------------------------------------------- 
Operating Income                             85,240     74,525    78,222     69,842 
                                       -------------------------------------------- 
Other Income and (Deductions)                                                        
  Allowance for equity funds used                                                   
    during construction                       1,446      1,467     1,446      1,467 
  Taxes on nonoperating income                  631      1,540       856        740 
  Other - net                                (2,201)    (2,996)   (2,746)    (3,091) 
                                       -------------------------------------------- 
      Net other income and 
          (deductions)                         (124)        11      (444)      (884) 
                                       -------------------------------------------- 
Income Before Interest Charges               85,116     74,536    77,778     68,958 
                                       -------------------------------------------- 
Interest Charges 
  Long-term debt                             22,130     21,871    18,008     19,116 
  Short-term debt and other                   5,628      4,897     5,532      4,897 
  Allowance for borrowed funds 
    used during construction                   (665)    (1,227)     (665)    (1,227) 
  Preferred dividend requirements of 
    SDG&E                                     1,645      1,645      --         --   
                                       -------------------------------------------- 
      Net interest charges                   28,738     27,186    22,875     22,786 
                                       -------------------------------------------- 
Net Income                                   56,378     47,350    54,903     46,172 
Preferred Dividend Requirements                --         --       1,645      1,645 
                                       -------------------------------------------- 
Earnings Applicable to Common Shares        $56,378    $47,350   $53,258    $44,527 
                                       ============================================ 
Average Common Shares Outstanding           113,616    116,565 
                                       ======================= 
Earnings Per Common Share                     $0.50      $0.41 
                                       ======================= 
Dividends Declared Per Common Share           $0.39      $0.39 
                                       ======================= 
 
See notes to financial statements. 
 
</TABLE> 
 
 
 
 
<TABLE> 
STATEMENTS OF INCOME (unaudited) 
In thousands except per share amounts 
<CAPTION> 
                                          Enova Corporation 
                                          and Subsidiaries             SDG&E 
                                       ----------------------   ------------------ 
For the six months ended June 30,          1997       1996      1997       1996 
                                       -------------------------------------------- 
<S>                                        <C>        <C>       <C>        <C> 
Operating Revenues 
  Electric                                 $790,710   $744,264  $790,710   $744,264 
  Gas                                       195,818    165,899   195,818    165,899 
  Other                                      22,883     26,701      --         --   
                                       -------------------------------------------- 
      Total operating revenues            1,009,411    936,864   986,528    910,163 
                                       -------------------------------------------- 
Operating Expenses 
  Electric fuel                              78,422     49,404    78,422     49,404 
  Purchased power                           176,768    148,148   176,679    148,148 
  Gas purchased for resale                   90,633     69,187    90,513     68,886 
  Maintenance                                43,355     31,653    43,355     31,653 
  Depreciation and decommissioning          171,881    163,929   161,128    154,804 
  Property and other taxes                   22,758     23,211    22,672     23,211 
  General and administrative                 95,846     97,932    89,251     94,360 
  Other                                     108,223    103,401    83,461     80,433 
  Income taxes                               66,890     82,482    99,895    105,252 
                                       -------------------------------------------- 
      Total operating expenses              854,776    769,347   845,376    756,151 
                                       -------------------------------------------- 
Operating Income                            154,635    167,517   141,152    154,012 
                                       -------------------------------------------- 
Other Income and (Deductions)                                                        
  Allowance for equity funds used                                                   
    during construction                       2,869      2,716     2,869      2,716 
  Taxes on nonoperating income                5,699      1,085     1,288        285 
  Other - net                                (2,606)    (2,622)   (4,437)    (2,489) 
                                       -------------------------------------------- 
      Net other income and 
          (deductions)                        5,962      1,179      (280)       512 
                                       -------------------------------------------- 
Income Before Interest Charges              160,597    168,696   140,872    154,524 
                                       -------------------------------------------- 
Interest Charges 
  Long-term debt                             43,859     44,433    35,933     38,210 
  Short-term debt and other                   9,500      9,364     9,404      9,364 
  Allowance for borrowed funds 
    used during construction                 (1,297)    (1,794)   (1,297)    (1,794) 
  Preferred dividend requirements of 
    SDG&E                                     3,291      3,291      --         --   
                                       -------------------------------------------- 
      Net interest charges                   55,353     55,294    44,040     45,780 
                                       -------------------------------------------- 
Net Income                                  105,244    113,402    96,832    108,744 
Preferred Dividend Requirements                --         --       3,291      3,291 
                                       -------------------------------------------- 
Earnings Applicable to Common Shares       $105,244   $113,402   $93,541   $105,453 
                                       ============================================ 
Average Common Shares Outstanding           115,026    116,568 
                                       ======================= 
Earnings Per Common Share                     $0.91      $0.97 
                                       ======================= 
Dividends Declared Per Common Share           $0.78      $0.78 
                                       ======================= 
 
See notes to financial statements. 
 
</TABLE> 
 
 
 
 
<TABLE> 
BALANCE SHEETS 
In thousands of dollars 
<CAPTION> 
                                            Enova Corporation 
                                            and Subsidiaries               SDG&E 
                                     -------------------------- -------------------------- 
Balance at                              June 30,   December 31,    June 30,   December 31, 
                                           1997         1996         1997         1996 
                                       (unaudited)               (unaudited) 
                                     ------------- ------------ ------------- ------------ 
<S>                                     <C>          <C>          <C>          <C> 
ASSETS 
Utility plant - at original cost        $5,770,023   $5,704,464   $5,770,023   $5,704,464 
Accumulated depreciation  
  and decommissioning                   (2,782,591)  (2,630,093)  (2,782,591)  (2,630,093) 
                                       -----------  -----------  -----------  ----------- 
         Utility plant-net               2,987,432    3,074,371    2,987,432    3,074,371 
                                       -----------  -----------  -----------  ----------- 
Investments and other property             780,016      650,188      366,799      337,520 
                                       -----------  -----------  -----------  ----------- 
Current assets                                                                                            
Cash and temporary investments             112,847      173,079       49,312       81,409 
Accounts receivable                        227,225      186,529      225,429      187,986 
Notes receivable                            28,961       33,564         --           --   
Inventories                                 58,670       63,437       57,523       63,078 
Other                                       24,658       47,094       24,451       33,227 
                                       -----------  -----------  -----------  ----------- 
         Total current assets              452,361      503,703      356,715      365,700 
                                       -----------  -----------  -----------  ----------- 
Deferred taxes recoverable in rates        182,009      189,193      182,009      189,193 
                                       -----------  -----------  -----------  ----------- 
Deferred charges and other assets          203,165      231,782      191,291      193,732 
                                       -----------  -----------  -----------  ----------- 
         Total                          $4,604,983   $4,649,237   $4,084,246   $4,160,516 
                                       ===========  ===========  ===========  =========== 
CAPITALIZATION AND LIABILITIES                                                                            
Capitalization                                                                                            
Common equity                           $1,518,864   $1,569,670   $1,337,887   $1,404,136 
Preferred stock of SDG&E                                                                                  
  Not subject to mandatory redemption       78,475       78,475       78,475       78,475 
  Subject to mandatory redemption           25,000       25,000       25,000       25,000 
Long-term debt                           1,510,538    1,479,338    1,272,226    1,284,816 
                                       -----------  -----------  -----------  ----------- 
         Total capitalization            3,132,877    3,152,483    2,713,588    2,792,427 
                                       -----------  -----------  -----------  ----------- 
Current liabilities 
Short-term borrowings                        1,000         --          1,000         --                    
Current portion of long-term debt           54,858       69,902        6,722       33,639 
Accounts payable                           120,183      175,815      119,507      174,884 
Due to affiliates                             --           --         16,074        7,214 
Dividends payable                           45,956       47,213       45,956       47,131 
Interest and taxes accrued                  25,606       21,259       46,338       12,824 
Regulatory balancing accounts  
  overcollected-net                         68,532       35,338       68,532       35,338 
Other                                      167,669      158,317      111,148      110,743 
                                       -----------  -----------  -----------  ----------- 
         Total current liabilities         483,804      507,844      415,277      421,773 
                                       -----------  -----------  -----------  ----------- 
Customer advances for construction          33,530       34,666       33,530       34,666 
Accumulated deferred income taxes-net      503,984      497,400      485,686      487,119 
Accumulated deferred investment  
  tax credits                               63,143       64,410       63,143       64,410 
Deferred credits and other liabilities     387,645      392,434      373,022      360,121 
                                       -----------  -----------  -----------  ----------- 
         Total                          $4,604,983   $4,649,237   $4,084,246   $4,160,516 
                                       ===========  =========== ============ ============ 
 
See notes to financial statements. 
 
</TABLE> 
 
 
 
<TABLE> 
STATEMENTS OF CASH FLOWS (unaudited) 
In thousands of dollars 
<CAPTION> 
                                                        Enova Corporation      
                                                         and Subsidiaries              SDG&E 
                                                      ----------------------  ---------------------- 
For the six months ended June 30,                       1997       1996          1997        1996 
                                                      ----------  ----------  ----------  ---------- 
<S>                                                    <C>         <C>         <C>         <C> 
Cash Flows from Operating Activities 
   Net income                                          $105,244    $113,402    $ 96,832    $108,744     
Adjustments to reconcile income from continuing 
   operations to net cash provided by operating activities 
     Depreciation and decommissioning                   171,881     163,929     161,128     154,804 
     Amortization of deferred charges and other assets    3,231       2,873       3,231       2,873 
     Amortization of deferred credits  
       and other liabilities                            (19,673)    (17,537)     (2,129)       (585) 
     Allowance for equity funds used during construction (2,869)     (2,716)     (2,869)     (2,716) 
     Deferred income taxes and investment tax credits     2,458     (23,146)        115     (23,573)  
     Other-net                                           17,680      20,508      (3,971)       (697)   
Changes in working capital components 
     Accounts and notes receivable                      (36,093)     (3,358)    (37,443)     (2,230) 
     Inventories                                          4,767      (2,385)      5,555      (2,077)   
     Other current assets                                13,003        (108)      1,140          23 
     Accounts payable and other current liabilities     (43,869)     (9,662)    (47,551)    (10,708) 
     Interest and taxes accrued                          37,542      36,783      59,238      51,152 
     Regulatory balancing accounts                       33,194      (8,118)     33,194      (8,118) 
Cash used by discontinued operations                       --          --          --       (11,544) 
                                                      ----------  ----------  ----------  ---------- 
       Net cash provided by operating activities        286,496     270,465     266,470     255,348  
                                                      ----------  ----------  ----------  ---------- 
Cash Flows from Financing Activities 
     Regular dividends paid                             (91,047)    (90,927)    (94,256)    (94,488) 
     Special dividend paid	                                --          --       (66,150)       --  
     Short-term borrowings-net                            1,000        --         1,000        --  
     Issuances of long-term debt                           --         2,300        --          -- 
     Repayment of long-term debt                        (70,189)    (23,588)    (37,500)       (293)   
     Repurchase of common stock                         (66,314)       (480)       --          -- 
     Redemption of preferred stock                         --       (15,155)       --       (15,155) 
                                                      ----------  ----------  ----------  ---------- 
       Net cash used by financing activities           (226,550)   (127,850)   (196,906)   (109,936) 
                                                      ----------  ----------  ----------  ---------- 
Cash Flows from Investing Activities 
     Utility construction expenditures                  (84,979)    (85,743)    (84,979)    (85,743) 
     Contributions to decommissioning funds             (11,016)    (11,016)    (11,016)    (11,016) 
     Other-net                                          (24,183)    (10,879)     (5,666)    (10,705) 
                                                      ----------  ----------  ----------  ---------- 
       Net cash used by investing activities           (120,178)   (107,638)   (101,661)   (107,464) 
                                                      ----------  ----------  ----------  ---------- 
Net increase (decrease)                                 (60,232)     34,977     (32,097)     37,948 
Cash and temporary investments, beginning of period     173,079      96,429      81,409      20,755 
                                                      ----------  ----------  ----------  ---------- 
Cash and temporary investments, end of period          $112,847    $131,406    $ 49,312    $ 58,703 
                                                      ==========  ==========  ==========  ========== 
Supplemental disclosure of Cash Flow Information 
     Income tax payments (net of refunds)              $ 15,436    $ 69,386    $ 40,650    $ 80,334   
                                                      ==========  ==========  ==========  ========== 
     Interest payments, net of amounts capitalized     $ 58,708    $ 51,452    $ 44,614    $ 42,340 
                                                      ==========  ==========  ==========  ========== 
Supplemental Schedule of Noncash Activities: 
   Investing and Financing 
     Real estate investments                           $ 88,632    $ 47,367        --          -- 
     Cash paid                                             (279)       --          --          -- 
                                                      ----------  ----------  ----------  ---------- 
     Liabilities assumed                               $ 88,353    $ 47,367        --          -- 
                                                      ==========  ==========  ==========  ========== 
 
   Net assets of affiliates transferred to parent          --          --          --      $150,069 
                                                      ==========  ==========  ==========  ========== 
 
See notes to financial statements. 
                                                                  
 
</TABLE> 
              NOTES TO FINANCIAL STATEMENTS (Unaudited) 
 
1.	GENERAL 
 
This Quarterly Report on Form 10-Q is a combined filing of Enova  
Corporation and SDG&E. The financial statements presented herein  
represent the consolidated statements of Enova Corporation and its  
subsidiaries (including SDG&E), as well as the stand-alone statements of  
SDG&E. Unless otherwise indicated, the "Notes to financial Statements"  
and "Management's Discussion and Analysis of Financial Condition and  
Results of Operations" herein pertain both to SDG&E and to Enova  
Corporation as a consolidated entity. 
 
The Registrants believe all adjustments necessary to present a fair  
statement of the consolidated financial position and results of  
operations for the periods covered by this report, consisting of  
recurring accruals, have been made. 
 
The Registrants' significant accounting policies, as well as those of  
their subsidiaries, are described in the notes to consolidated financial  
statements in Enova Corporation's 1996 Annual Report to Shareholders.  
The same accounting policies are followed for interim reporting  
purposes. 
 
This quarterly report should be read in conjunction with the  
Registrants' 1996 Annual Report on Form 10-K which included the  
financial statements and notes thereto, and its Quarterly Report on Form  
10-Q for the three months ended March 31, 1997. The "Management's  
Discussion & Analysis of Financial Condition and Results of Operations"  
included in the Registrants' 1996 Annual Report to Shareholders was  
incorporated by reference into the Registrants' 1996 Annual Report on  
Form 10-K and filed as an exhibit thereto. 
 
2.	BUSINESS COMBINATION 
 
In March 1997 the shareholders of both Enova Corporation and Pacific  
Enterprises (PE) approved the proposed combination of Enova and PE.  
Consummation of the combination is conditional upon the approvals of the  
California Public Utilities Commission and various other regulatory  
bodies.  
 
In June 1997 the CPUC revised its procedural schedule for the proposed  
business combination after delaying until July 1997 its final decision  
on the Performance-Based Ratemaking (PBR) proceeding for Southern  
California Gas Company (SoCalGas), PE's principal subsidiary. Under the  
new timeline, a CPUC Administrative Law Judge will issue a proposed  
decision on the combination in late January 1998, with a CPUC decision  
scheduled for March 1998. 
 
On July 16, 1997 the CPUC issued its decision on SoCalGas's PBR  
proceeding. The decision adopts a rate-setting mechanism for SoCalGas  
that provides incentives for cost control and efficiency improvement,  
including comparisons of productivity and other factors against  
benchmarks based on industry performance. SoCalGas had been operating  
under traditional "cost of service" regulation. The decision provides  
for, among other things, a net rate reduction of $160 million. Enova is  
analyzing the decision to determine the effect on Pacific Enterprises  
and on the new company formed by the proposed business combination. 
 
Enova and PE submitted a joint Proponents' Environmental Assessment to  
the CPUC, stating that the plan of merger will not result in any  
activities or operational changes that may cause a significant adverse  
effect on the environment. In April 1997 the CPUC issued a draft  
Negative Declaration concluding that the plan of merger will not result  
in significant adverse effects on the environment and, therefore, no  
Environmental Impact Report or mitigation is necessary. Under the  
current schedule, the period during which the public may comment on the  
draft Negative Declaration ended in May 1997 and the final version of  
the proposed Negative Declaration is expected to be published in the  
third quarter of 1997. The Negative Declaration will become final when  
certified by the Commission. 
 
On June 25, 1997 the Federal Energy Regulatory Commission approved the  
proposed business combination subject to conditions that the combined  
company will not unfairly use its market power with the potential  
control over natural-gas transportation to gas-fired electric-generation  
plants. In its decision, the FERC acknowledged that this issue is  
clearly within the jurisdiction of the CPUC and the conditions will be  
considered during the CPUC review process. Various parties have since  
filed a joint petition with the FERC asking it for a rehearing. 
 
Effective April 1997 substantially all of the activities and certain  
assets of Enova subsidiaries, Enova Energy and Enova Technologies, were  
transferred to Energy Pacific, the joint venture between certain  
unregulated subsidiaries of Enova and PE to provide integrated energy  
and energy-related products and services. 
 
3.	MATERIAL CONTINGENCIES 
 
INDUSTRY RESTRUCTURING -- CALIFORNIA PUBLIC UTILITIES COMMISSION 
 
In May 1997 the CPUC issued a decision stating that direct access will  
be available to all electric customers on January 1, 1998 instead of  
phased in over five years as originally envisioned. The CPUC concluded  
that there are no technical or operational barriers to justify limited  
direct access availability once electric restructuring commences. The  
decision gives power companies permission to begin direct marketing on  
July 1, 1997 and sets November 1, 1997 as the date customers can begin  
choosing electricity providers.   
 
As discussed in Note 10 in the notes to consolidated financial  
statements of the 1996 Annual Report to Shareholders, electric utilities  
will be allowed a reasonable opportunity to recover their stranded costs  
through December 31, 2001. SDG&E's competition transition charge (CTC)  
application filed in October 1996 estimates transition costs totaling $2  
billion (net present value in 1998 dollars). These identified transition  
costs have been audited by independent auditors selected by the CPUC.  
The auditors found SDG&E's recorded and forecasted cost estimates  
reasonable and have identified $73 million as requiring further action  
before being deemed a recoverable CTC. In June 1997 the CPUC issued a  
decision that provides for the recovery of uneconomic generation-related  
costs and associated regulatory assets. The decision  establishes a CTC  
rate component that will be determined on a residual basis. The CTC  
revenues will be first applied to "current costs," which includes, among  
other things, purchased-power expenses, and will next be applied to the  
transition assets that are being depreciated and/or amortized over a 48- 
month period. Should there be any CTC revenues remaining, the revenues  
may be used to accelerate the recovery of transition assets with a high  
rate of return. The decision does not include generation plant additions  
made after December 20, 1995. Instead, each utility must file a separate  
application seeking a reasonableness review thereof. SDG&E expects to  
file such an application during the third quarter of 1997 to address  
1996 capital additions, and another in early 1998 to address 1997  
additions. 
 
In May 1997 SDG&E and the other California investor-owned electric  
utilities (IOUs) filed applications with the CPUC for authority to issue  
rate-reduction bonds. California's restructuring law (AB 1890) requires  
a 10-percent reduction of residential and small commercial customers'  
rates beginning in January 1998. AB 1890 provides for the issuance of  
rate-reduction bonds by an agency of the State of California to enable  
the IOUs to achieve this rate reduction. SDG&E's application requests  
authority to issue up to $800 million in bonds. SDG&E estimates that it  
will need $710 million of bond proceeds to enable it to effect a  
sufficient decrease in rate base to finance the desired rate reduction.  
These bonds will be repaid over 10 years by SDG&E's residential and  
small commercial customers via a charge on their electric bills. A final  
CPUC decision is expected in September 1997. The IOUs are awaiting a  
ruling from the Internal Revenue Service on the tax consequences of the  
bond issuance. If an adverse ruling is made by the IRS, the issuance of  
the rate-reduction bonds could be at risk. SDG&E maintains that it would  
not be required to provide for the 10-percent rate reduction in the  
event that the bonds are not issued. The Securities and Exchange  
Commission has ruled that these bonds should be reflected on the  
utilities' balance sheets as debt, even though the bonds would not be  
secured by utility assets, but rather by the revenue streams collected  
from the charge to residential and small commercial customers. 
 
In addition, the California legislation includes a rate freeze for all  
customers. Until the earlier of March 31, 2002, or when transition cost  
recovery is complete, SDG&E's system average rate will be frozen at June  
10, 1996 levels (9.64 cents per kwh), except for the impact of fuel cost  
changes and the 10-percent rate reduction. In any event, rates cannot be  
increased above 9.985 cents per kwh. The rate cap will be reduced in  
conjunction with the 10-percent rate reduction for residential and small  
commercial customers. During the first quarter of 1997, soaring natural- 
gas prices resulted in electric rate increases that raised SDG&E's  
system average rate from 9.64 cents per kwh to 9.985 cents per kwh.  
Natural-gas prices have since decreased, but the mechanism, which is  
based on a 12-month rolling average, continues to push SDG&E's system  
average rate against the 9.985 cents-per-kwh rate cap. 
 
SDG&E currently accounts for the economic effects of regulation in  
accordance with SFAS No. 71, "Accounting for the Effects of Certain  
Types of Regulation," as described in the notes to consolidated  
financial statements in the 1996 Annual Report to Shareholders. The SEC  
has indicated a concern that the California investor-owned utilities may  
not meet the criteria of SFAS No. 71 with respect to their electric  
generation net regulatory assets. The Emerging Issues Task Force of the  
Financial Accounting Standards Board has concluded that the  
discontinuance of SFAS No. 71 applied to the utilties' generation  
business would not result in a write-off of their net regulatory assets,  
since the CPUC has approved the recovery of these assets by the  
distribution portion of their business. 
 
INDUSTRY RESTRUCTURING -- FEDERAL ENERGY REGULATORY COMMISSION 
 
In March 1997 the utilities jointly filed plans with the FERC, detailing  
the structure of California's independent system operator (ISO) that  
will manage the state's transmission grid and outlining the development  
of a power exchange to act as a spot market for trading electricity. In  
November 1996 the FERC conditionally approved joint recommendations from  
the utilities on the creation of an ISO and power exchange, but required  
further information from the utilities as to how they would be  
structured and operate. 
 
NUCLEAR INSURANCE 
 
SDG&E and the co-owners of the San Onofre units have purchased primary  
insurance of $200 million, the maximum amount available, for public  
liability claims. An additional $8.7 billion of coverage is provided by  
secondary financial protection required by the Nuclear Regulatory  
Commission and provides for loss sharing among utilities owning nuclear  
reactors if a costly accident occurs. SDG&E could be assessed  
retrospective premium adjustments of up to $32 million in the event of a  
nuclear incident involving any of the licensed, commercial reactors in  
the United States, if the amount of the loss exceeds $200 million. In  
the event the public liability limit stated above is insufficient, the  
Price-Anderson Act provides for Congress to enact further revenue- 
raising measures to pay claims, which could include an additional  
assessment on all licensed reactor operators.  
 
Insurance coverage is provided for up to $2.75 billion of property  
damage and decontamination liability. Coverage is also provided for the  
cost of replacement power, which includes indemnity payments for up to  
three years, after a waiting period of 21 weeks. Coverage is provided  
through mutual insurance companies owned by utilities with nuclear  
facilities. If losses at any of the nuclear facilities covered by the  
risk-sharing arrangements were to exceed the accumulated funds available  
from these insurance programs, SDG&E could be assessed retrospective  
premium adjustments of up to $5.1 million. 
 
CANADIAN GAS 
 
SDG&E has long-term pipeline capacity commitments related to its  
contracts for Canadian natural-gas supplies. These contracts are  
currently in litigation, as described in "Legal Proceedings" in the 1996  
Annual Report on Form 10-K beginning on page 19. If the supply of  
Canadian natural-gas to SDG&E is not resumed to a level approximating  
the related committed long-term pipeline capacity, SDG&E intends to  
continue using the capacity in other ways. 
 
ITEM 2.
           ENOVA CORPORATION/SAN DIEGO GAS & ELECTRIC COMPANY
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS 
 
This Quarterly Report on Form 10-Q includes forward-looking statements  
within the definition of Section 27A of the Securities Act of 1933 and  
Section 21E of the Securities Exchange Act of 1934. When used in  
"Management's Discussion and Analysis of Financial Condition and Results  
of Operations," the words "estimates", "expects", "anticipates", "plans"  
and similar expressions are intended to identify forward-looking  
statements that involve risks and uncertainties. 
 
Although the Registrants believe that their expectations are based on  
reasonable assumptions, they can give no assurance that those  
expectations will be realized. Important factors that could cause actual  
results to differ materially from those in the forward-looking  
statements herein include political developments affecting state and  
federal regulatory agencies, the pace and substance of electric industry  
deregulation in California and in the United States, the existence of or  
ability to create a market for rate-reduction bonds, the ability to  
effect a coordinated and orderly implementation of both state  
legislation and the CPUC's restructuring regulations, the consummation  
and timing of the proposed business combination of Enova Corporation and  
Pacific Enterprises, the level of sales of electricity, international  
political developments, and the timing and extent of changes in interest  
rates and prices for natural gas and electricity.  
 
RESULTS OF OPERATIONS: 
 
EARNINGS  
 
Earnings per common share for the quarter ended June 30, 1997 were $0.50  
compared to $0.41 for the corresponding period in 1996. Earnings per  
common share for the six months ended June 30, 1997 were $0.91 compared  
to $0.97 for 1996. The 1997 changes in earnings for the quarter and the  
six months are primarily due to previously announced changes related to  
the elimination of electric balancing accounts. Although no significant  
effect is expected for any full year, quarterly earnings will fluctuate  
significantly, depending on monthly or seasonal changes in electric  
sales and fuel prices. In general, earnings are expected to be higher in  
high sales-volume months and lower in others. 
 
OPERATING REVENUES 
 
For the quarter ended June 30, 1997 electric revenues increased from the  
corresponding period in 1996 primarily due to increased sales volume due  
to weather. Electric revenues increased for the six months ended June  
30, 1997 due to the increased sales volume and the accelerated recovery  
of San Onofre Nuclear Generating Station Units 2 and 3 which commenced  
in April 1996. Additional information concerning the recovery of SONGS  
Units 2 and 3 is provided in "Management's Discussion and Analysis of  
Financial Condition and Results of Operations" in the 1996 Annual Report  
to Shareholders on page 27. Gas revenues increased for the six months  
primarily due to the increases in both natural-gas prices and sales  
volume in the first quarter of 1997. 
 
OPERATING EXPENSES  
 
For the quarter and the six months ended June 30, 1997 electric fuel  
expense increased from the corresponding period in 1996 primarily due to  
increased natural-gas-fired generation and increases in natural-gas  
prices, offset by a decrease in nuclear generation as a result of SONGS  
Units 2 and 3 refuelings. This decrease in nuclear generation  
availability also resulted in an increase in purchased-power expense for  
both periods. Gas purchased for resale increased for the six months due  
to the increases in both natural-gas prices and sales volume in the  
first quarter of 1997.  
 
In addition, for the quarter and the six months ended June 30, 1997  
maintenance expense increased due to the additional costs incurred  
during SONGS Units 2 and 3 refuelings (see additional discussion under  
"San Onofre Nuclear Generating Station Units 2 & 3," below).  
Depreciation and decommissioning expense increased for the six months  
due to the accelerated recovery of SONGS Units 2 and 3. Income-tax  
expense decreased for the six months due to the decrease in operating  
income and the increase in income-tax benefits related to Enova  
Financial's increased investments in affordable-housing projects. 
 
OTHER 
 
Other income increased for the six months ended June 30, 1997 due to the  
first quarter 1997 tax benefits on nonoperating income relating to the  
1995 sale of Wahlco Environmental Systems, Inc. Additional information  
concerning the sale of Wahlco is provided in Note 3 in the notes to  
consolidated financial statements of the 1996 Annual Report to  
Shareholders. 
 
REGULATORY MATTERS: 
 
CALIFORNIA PUBLIC UTILITIES COMMISSION'S INDUSTRY RESTRUCTURING 
 
In December 1995 the CPUC issued its policy decision on the  
restructuring of California's electric utility industry to stimulate  
competition and reduce rates. In addition, in September 1996 California  
Governor Wilson signed into law a bill restructuring the industry. See  
additional discussion of industry restructuring in Note 3 of the notes  
to financial statements.  
 
CONSUMER EDUCATION 
 
The CPUC has approved a plan for the Consumer Education Program (CEP)  
jointly submitted by California's investor-owned utilities (IOUs). The  
plan establishes a 19-member Electric Restructuring Education Group  
(EREG) that includes one member from each of the IOUs. The EREG will  
design and implement the CEP. The CPUC has approved an initial CEP  
funding of $20 million to be provided by the IOUs in proportion to their  
1995 kwh sales. The final number, expected to be decided by the CPUC in  
August 1997, could be as high as $87 million. These funds will be  
recoverable through rates. The details of how these costs will be  
recovered under the rate cap are still being finalized. The CEP's  
objective will be to provide electric customers information to help them  
compare and choose among electric products and services when competition  
begins on January 1, 1998. The CEP's work is anticipated to begin by  
September 1, 1997 and end by May 31, 1998. In addition, in May 1997  
SDG&E filed a request with the CPUC for funding of a $1.4 million SDG&E- 
specific CEP to be an enhancement to the statewide program. In its  
request, SDG&E asked that the supplemental program's costs be eligible  
for recovery. 
 
PUBLIC POLICY PROGRAMS 
 
The CPUC has established a new administrative structure and initial  
funding levels to manage demand-side management, renewable-energy, low- 
income assistance, and research and development (R&D) programs beginning  
in January 1998. The CPUC has formed independent boards to oversee a  
competitive bidding process to administer demand-side management and  
low-income assistance programs. Until the transition to a fully  
competitive energy-services market is complete, customers will be  
required to provide the funding. SDG&E will be funded $32 million  
annually for demand-side management programs from January 1998 to  
December 2001. SDG&E will contribute $12 million in renewables funding.  
Low-income assistance funding will remain at 1996 authorized levels. The  
California Energy Commission will be allocated most of the $63 million  
authorized to administer the R&D programs, of which SDG&E will  
contribute $4 million. SDG&E's contributions to the renewables and R&D  
programs will be eligible for rate recovery. 
 
In May 1997 SDG&E filed a application for 1996 shareholder rewards  
totaling $41 million ($39 million in 1995) for its DSM programs. The  
rewards will be collected and recorded in earnings over ten years and  
are subject to CPUC approval. The revenue requirement increase is  
effective on January 1, 1998, but due to the rate cap, there will be no  
rate increase. If, during the industry-restructuring transition period,  
SDG&E is able to recover its transition costs and has revenue available  
under the rate cap, SDG&E will be able to recover these DSM earnings. A  
final CPUC decision is expected in the first quarter of 1998. SDG&E  
cannot predict the impact on future earnings of DSM programs when the  
transition to a competitive market is complete. 
 
NATURAL-GAS RATES 
 
In late 1996 natural-gas prices significantly increased primarily due to  
weather-related factors and low storage levels. As the price of natural  
gas increased beyond what SDG&E was authorized to charge for it, a $26  
million shortfall resulted. In July 1997 SDG&E received CPUC approval to  
raise gas rates by 6 cents per therm for 12 months beginning in August  
1997. The decision lifted a two-year cap on natural-gas rates that  
limited the amount that could be charged to 25 cents per therm. 
 
PERFORMANCE-BASED RATEMAKING 
 
Base-Rates PBR:  In May 1997 SDG&E filed an application with the CPUC  
that reflects a $1.9 million penalty for 1996. While SDG&E obtained the  
maximum rewards for employee safety and customer satisfaction, it did  
not meet its performance targets for system reliability and customer  
rates. Although SDG&E's electric rates declined in 1996, the average  
national rate declined proportionately more. A final CPUC decision is  
expected in the third quarter of 1997. The five-year PBR mechanism,  
which began in 1994, is currently under its mid-course review by the  
CPUC. A final decision is expected in the fourth quarter of 1997. 
 
SAN ONOFRE NUCLEAR GENERATION STATION UNITS 2 & 3 
 
In May 1997 the SONGS owners agreed to provide 150 acres of wetlands  
restoration, 150 acres of kelp reef and other mitigation that was  
ordered by the California Coastal Commission in April 1997. SDG&E's  
share of the cost is estimated to be $23 million. The SONGS owners have  
decided to pay for the actual costs of the mitigation work themselves  
rather than depositing the estimated costs in a trust. 
 
Unit 3 was shut down in April 1997 for its scheduled refueling. While  
conducting routine inspections, it was noted that, in several areas, the  
thickness of the heat transfer tubes' structural supports was  
significantly reduced, apparently due to erosion. In June 1997 the  
Nuclear Regulatory Commission approved the removing of the affected  
tubes from service as a corrective action and the unit's return to  
service. The NRC will make a further review in the next few months to  
determine the need for a mid-cycle outage, but the SONGS owners plan to  
schedule one in the second quarter of 1998 even without a NRC mandate.  
Unit 2, which recently went through inspection of its steam generators,  
showed no signs of this type of erosion. 
 
The Unit 3 refueling outage was extended by four weeks to repair a  
control rod that became separated from its extension shaft and a failed  
charging-system check valve. The unit returned to service on July 21,  
1997. When an identical check valve was tested in Unit 2, the same  
problem was discovered, causing the unit to be shut down on June 29,  
1997. The unit was restarted on July 16, 1997. 
 
ELECTRIC AND MAGNETIC FIELDS (EMF) 
 
The National Academy of Sciences (NAS) recently published its evaluation  
of potential EMF health risks. After examining more than 500 studies  
spanning 17 years of research, the NAS found that "the current body of  
evidence does not show that exposure to EMFs presents a human-health  
hazard." A recently completed study (the nation's largest, most  
extensive EMF research conducted to date) by the National Cancer  
Institute concluded that there is no evidence that children who live  
near high-current power lines have any higher incidence of leukemia than  
children who do not live near these lines. 
 
LIQUIDITY AND CAPITAL RESOURCES: 
 
Utility operations continue to be a major source of liquidity. In  
addition, financing needs are met primarily through the issuance of  
short-term and long-term debt, and common and preferred stock. These  
capital resources are expected to remain available. SDG&E's cash  
requirements include plant construction and other capital expenditures.  
Nonutility cash requirements include capital expenditures associated  
with subsidiary activities related to the plan to distribute natural gas  
in Mexico; new products; affordable-housing, leasing and other  
investments; and repayments and retirements of long-term debt. In  
addition to changes described elsewhere, major changes in cash flows are  
described below.  
 
OPERATING ACTIVITIES 
 
Besides the effects of other items discussed in this report, there were  
other significant changes in cash flows from operations for the six  
months ended June 30, 1997 compared to the corresponding 1996 period.  
Cash flows from accounts and notes receivable decreased due to an  
increase in accounts receivable at June 30, 1997 resulting from an  
increase in SDG&E's sales in June of 1997. Regulatory balancing accounts  
increased due to overcollections in the gas fixed cost account as a  
result of higher than authorized sales volumes. Accounts payable and  
other current liabilities decreased due to an increase in payments for  
purchased gas. 
 
FINANCING ACTIVITIES  
 
Enova Corporation anticipates that it will require only minimal amounts  
of short-term debt in 1997, primarily for utility operations. Enova does  
not expect to issue stock or long-term debt in 1997, other than for  
SDG&E-related refinancings. In conjunction with electric industry  
restructuring, rate-reduction bonds are expected to be issued by an  
agency of the State of California. Additional information concerning  
these bonds is provided in Note 3 of the notes to financial statements,  
above. 
 
Enova Financial repaid $30 million and issued $88 million of long-term  
debt during the first six months of 1997 in the ordinary course of  
business. During that same period SDG&E repaid $38 million of long-term  
debt.  
 
SDG&E had short-term bank lines of $50 million and long-term bank lines  
of $330 million with $1 million of short-term loans outstanding at June  
30, 1997. Commitment fees are paid on the unused portion of the lines.  
There are no requirements for compensating balances. 
 
In March 1997 Enova Corporation repurchased three million shares of its  
outstanding common stock. 
 
Quarterly cash dividends of $0.39 per share were declared for the first  
and second quarters of 1997 and for each quarter during the year ended  
December 31, 1996. The dividend payout ratio for the twelve months ended  
June 30, 1997 and years ended December 31, 1996, 1995, 1994, 1993 and  
1992 were 81 percent, 79 percent, 80 percent, 130 percent, 82 percent  
and 81 percent, respectively. The increase in the payout ratio for the  
year ended December 31, 1994 was due to the writedowns recorded during  
1994. For additional information regarding the writedowns, see Enova  
Corporation's 1996 Annual Report on Form 10-K. The payment of future  
dividends is within the discretion of the directors and is dependent  
upon future business conditions, earnings and other factors. Enova's  
directors have set a goal to reach a dividend payout of 60 percent to 70  
percent of earnings through earnings growth and new investment. Net cash  
flows provided by operating activities currently are sufficient to  
maintain the payment of dividends at the anticipated level.  
 
SDG&E maintains its capital structure so as to obtain long-term  
financing at the lowest possible rates.  The following table shows the  
percentages of capital represented by the various components. The  
capital structures are net of the construction funds held by a trustee  
in 1992 and 1993.                                                              

                                                                 June 30, 
                                1992   1993   1994   1995   1996   1997       
              -----------------------------------------------------------  
              Common equity      47%    47%    48%    49%    50%    49%    
              Preferred stock     5      4      4      4      4      4    
              Debt and leases    48     49     48     47     46     47    
              -----------------------------------------------------------  
              Total             100%   100%   100%   100%   100%   100%  
              ----------------------------------------------------------- 
 
The following table lists key financial ratios for SDG&E. 
 
                                      Twelve                     Year 
                                   months ended                  ended 
                                     June 30,                 December 31, 
                                       1997                       1996 
                                -----------------           ------------- 
Pretax interest coverage              5.1 X                       5.2 X 
Internal cash generation              151 %                       127 % 
Construction expenditures as  
   a percent of capitalization        7.7 %                       7.4 % 
 
DERIVATIVES: Registrants use derivative financial instruments to reduce  
exposure to fluctuations in interest rates, foreign currency exchange  
rates and natural-gas prices. These financial instruments are with major  
investment firms and expose Registrants to market and credit risks.  
These risks may at times be concentrated with certain counterparties,  
although counterparty non-performance is not anticipated. Registrants do  
not use derivatives for trading or speculative purposes. 
 
At June 30, 1997 SDG&E had one interest-rate swap agreement: a floating- 
to-fixed-rate swap maturing in 2002 associated with $45 million of  
variable-rate bonds. SDG&E's pension fund periodically uses foreign  
currency forward contracts to reduce its exposure from exchange-rate  
fluctuations associated with certain investments in foreign equity  
securities. These contracts generally have maturities ranging from three  
to six months. Such contracts may expose the pension fund to credit loss  
if the counterparties fail to perform. 
 
At June 30, 1997 Enova had various open natural-gas futures positions  
used to hedge against the volatility of natural-gas prices. The total  
amount of these open positions was immaterial. 
 
There were no other derivative financial instruments outstanding at June  
30, 1997. 
 
INVESTING ACTIVITIES  
 
Cash used in investing activities for the six months ended June 30, 1997  
included utility construction expenditures and payments to the SONGS  
decommissioning trust. Utility construction expenditures, excluding  
nuclear fuel and the allowance for equity funds used during  
construction, were $209 million in 1996 and are estimated to be $230  
million in 1997. Enova continuously reviews its construction, investment  
and financing programs and revises them in response to changes in  
competition, customer growth, inflation, customer rates, the cost of  
capital, and environmental and regulatory requirements. Among other  
things, SDG&E's level of expenditures in the next few years will depend  
heavily on the impacts of industry restructuring, and on the timing of  
expenditures to comply with air emission reduction and other  
environmental requirements. Payments to the nuclear decommissioning  
trust are expected to continue until SONGS is decommissioned, which is  
not expected to occur before 2013. Although Unit 1 was permanently shut  
down in 1992, it is expected to be decommissioned concurrently with  
Units 2 and 3. 
 
In April 1997 Enova invested $21 million in Energy Pacific, the joint  
venture with Pacific Enterprises discussed in Note 2. 
 
Enova's level of non-utility expenditures in the next few years will  
depend primarily on the activities of its other subsidiaries, including  
Enova International's plan to develop natural-gas distribution systems  
in Mexico. In March 1997 the Mexican Energy Regulatory Commission  
awarded Enova International and its partners, Pacific Enterprises  
International and Proxima S.A. de C.V., its second natural-gas  
privatization license in Mexico, allowing the partnership to build and  
operate a natural-gas distribution system in Chihuahua, Mexico. The  
partnership plans to invest approximately $50 million in the project and  
serve at least 50,000 customers in the first five years of operation. 
 
OTHER SIGNIFICANT BALANCE SHEET CHANGES 
 
Besides the effects of items discussed in the preceding pages, the only  
other significant change to the Registrants' balance sheets at June 30,  
1997, compared to December 31, 1996 was a decrease in other current  
assets resulting from a shift in Enova's net deferred tax position from  
current assets to current liabilities.  
 
 
 
 
 
 
 
                     PART II - OTHER INFORMATION 
 
 
ITEM 1.	LEGAL PROCEEDINGS 
 
There have been no significant subsequent developments in litigation  
proceedings that were outstanding at December 31, 1996 and there have  
been no significant new litigation proceedings since that date. 
 
 
 
ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K 
 
(a)	Exhibits  
 
	Exhibit 12 - Computation of ratios 
 
	12.1	Computation of Ratio of Earnings to Combined Fixed Charges 
		and Preferred Stock Dividends as required under SDG&E's 
		August 1993 registration of 5,000,000 shares of Preference 
		Stock (Cumulative). 
 
	Exhibit 27 - Financial Data Schedules 
 
	27.1	Financial Data Schedule for the six months ended June 30,  
		1997 for Enova Corporation. 
 
	27.2	Financial Data Schedule for the six months ended June 30, 
		1997 for SDG&E. 
 
(b)	Reports on Form 8-K 
 
	A Current Report on Form 8-K was filed on July 17, 1997  
	announcing the California Public Utilities Commission's decision  
	on Southern California Gas Company's Performance-Based Ratemaking  
	proceeding. 
 
 
                            SIGNATURE 
 
Pursuant to the requirement of the Securities Exchange Act of 1934, the  
registrant has duly caused this quarterly report to be signed on its  
behalf by the undersigned thereunto duly authorized. 
 
                                       						ENOVA CORPORATION 
 
	                                   					SAN DIEGO GAS & ELECTRIC COMPANY 
				                                      					(Registrants) 
 
 
 
Date: July 29, 1997             	By:            /s/ F.H. Ault
                                      ----------------------------------- 
                                		   				         (Signature) 
 
	                                  					          F. H. AULT 
                                       Vice President and Controller