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, 2004

	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

PART I

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,

				2004	2003	2004	2003

INCOME

	Interest income			$3,730	$4,748	$7,766	$9,808
	Other income			274	266	575	567

			Total Income	4,004	5,014	8,341	10,375

EXPENSES

	Interest expense			3,840	4,856	7,987	10,027
	General & administrative			164	158	354	348

		Total Expenses		4,004	5,014	8,341	10,375


		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 note to financial statements.

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

				June 30,		December 31,
				2004		2003

ASSETS

Current Assets:
	Cash and cash equivalents		$	565	$	565
	Interest and other receivables			4,241		3,914
	Current portion of transition property			65,800		65,800

		Total Current Assets		70,606		70,279

Noncurrent Assets:
	Transition property			158,351		190,404
	Deferred financing costs			2,290		2,617
	Restricted funds			21,697		18,157

		TOTAL ASSETS	$	252,944	$	281,457




LIABILITIES AND MEMBER'S EQUITY

Current Liabilities:
	Current portion of long-term debt		$	65,800	$	65,800
	Overcollections from SDG&E customers			18,507		14,967

		Total Current Liabilities		84,307		80,767

Long-term debt				165,347		197,400

		Total Liabilities		249,654		278,167

Member's Equity				3,290		3,290

		TOTAL LIABILITIES AND MEMBER'S EQUITY	$	252,944	$	281,457




See note to financial statements.

SDG&E FUNDING LLC
STATEMENT OF CASH FLOWS
(In thousands of dollars)
					Six Months Ended
					June 30,

					2004		2003

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		333
			Increase in interest and other receivables		(327	)	(327	)
			Increase in overcollections from SDG&E customers		3,540		2,760


	NET CASH PROVIDED BY OPERATING ACTIVITIES				3,540		2,766


CASH FLOWS FROM FINANCING ACTIVITIES:

	Collection of transition property from SDG&E				32,053		32,017
	Payments on long-term debt				(32,053	)	(32,017	)
	Increase in restricted funds				(3,540	)	(2,766	)


	NET CASH USED BY FINANCING ACTIVITIES				(3,540	)	(2,766	)


NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS					--		--
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD					565		565

CASH AND CASH EQUIVALENTS AT END OF PERIOD				$	565	$	565




SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
	Interest payments			$	8,059	$	10,111





See note to financial statements.

Note to Financial Statements

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 Sempra Energy. Information in this quarterly report is unaudited and should be read in conjunction with SDG&E Funding LLC's Financial Statements and Notes to Financial Statements included in its 2003 Annual Report on Form 10-K and in its Quarterly Report on Form 10-Q for the three-month period ended March 31, 2004.

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 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.

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 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 (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, its federal income tax effects and its State of California franchise tax effects accrue to SDG&E.

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 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, 2003 and its Quarterly Report on Form 10-Q for the three-month period ended March 31, 2004.

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 Indenture). 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. 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 $20,888,000 resulted in a net overcollection for the three months ended June 30, 2004, of $1,782,000 after deducting scheduled principal and interest payments of $18,844,000, payments of $180,000 for servicing fees and other expenses, and $82,000 retained to fund the Overcollateralization Account established under the Notes' indenture. Collections of $19,895,000 resulted in a net undercollection for the three months ended June 30, 2003, of $215,000 after deducting scheduled principal and interest payments of $19,807,000, payments of $221,000 for servicing fees and other expenses, and $82,000 retained to fund the Overcollateralization Account established under the Notes' indenture.

Collections of $44,022,000 resulted in a net overcollection for the six months ended June 30, 2004, of $3,374,000 after deducting scheduled principal and interest payments of $40,113,000, payments of $371,000 for servicing fees and other expenses, and $164,000 retained to fund the Overcollateralization Account established under the Notes' indenture. Collections of $45,347,000 resulted in a net overcollection for the six months ended June 30, 2003, of $2,602,000 after deducting scheduled principal and interest payments of $42,128,000, payments of $453,000 for servicing fees and other expenses, and $164,000 retained to fund the Overcollateralization Account established under the Notes' indenture.

The FTA Charges are adjusted at least annually if there is a material shortfall or overage in collections. Management believes that it is reasonable to expect future collections of FTA Charges to be sufficient to make scheduled payments on the Notes and pay related expenses on a timely basis.

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.

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, 2004, 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, 2004, 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

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 Quarterly Servicer's Certificate dated June 21, 2004.

(b) Reports on 8-K:

None.

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: August 16, 2004

By: /s/ James P. Trent
-----------------------------
James P. Trent
Chief Financial Officer and
Chief Accounting Officer

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