On April 13, 1997 at 1853 hours Pacific daylight time, a Head AX8-88, hot air balloon, N380P, impacted the ground with a high rate of sink approximately 8 statute miles east of Gillespie Field, San Diego, California. The balloon was owned and operated by the pilot for the local area personal flight. The balloon sustained substantial damage and the pilot and two passengers sustained serious injuries. There was no flight plan filed and visual meteorological conditions prevailed. The flight originated approximately 5 statute miles northeast of Spring Valley for a planned 1-hour flight. Two witnesses stated that they observed the balloon hit the ground with what they thought was a high sink rate and then become airborne again for a short time before recontacting the ground. At the second ground impact, the witnesses saw three persons ejected from the crew basket. The balloon was then observed to drift away until it was brought to rest by contact with some nearby power lines. The pilot stated in a verbal pilot report that he had intentionally increased the balloon's sink rate to avoid drifting into some power lines which lay ahead, but did not have sufficient altitude remaining to return to a nominal sink rate prior to impact with the ground.