ML020390393

Declaration of Robert Jay Moore Re Second Interim Application of Milbank, Tweed, Hadley & Mccloy Llp for Allowance and Payment of Compensation and Reimbursement of Expenses (August 1, 2001 Through November 30, 2001) and Re Additional Disclo

ML020390393
Person / Time
Site:	Diablo Canyon
Issue date:	01/12/2002
From:	Moore R Milbank, Tweed, Hadley & McCloy, LLP
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
SF 01-30923 DM
Download: ML020390393 (35)

Text

1 Paul S. Aronzon (#88781)

Robert Jay Moore (#77498) 2 Michael I. Sorochinsky (#166708)

MILBANK, TWEED, HADLEY & McCLOY LLP 3 601 South Figueroa Street, 30th Floor Los Angeles, California 90017 4 Telephone: (213) 892-4000 Facsimile: (213) 629-5063 5

Counsel for Official Committee 6 of Unsecured Creditors 7

8 9

UNITED STATES BANKRUPTCY COURT 10 NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 11

.0

-J 12 Y

13

,d In re Case No. SF 01-30923 DM 14 PACIFIC GAS AND ELECTRIC Chapter 11

<F 15 COMPANY, a California corporation, zE

-J. . 16 DECLARATION OF ROBERT JAY Debtor.

MOORE RE SECOND INTERIM 17 APPLICATION OF MILBANK, TWEED, 18 HADLEY & McCLOY LLP FOR ALLOWANCE AND PAYMENT OF 19 COMPENSATION AND REIMBURSEMENT OF EXPENSES 20 (AUGUST 1, 2001 THROUGH 21 NOVEMBER 30, 2001) AND RE ADDITIONAL DISCLOSURES 22 Hearing:

23 Date: February 26, 2002 24 Time: 9:30 a.m.

Place: 235 Pine Street, 2 2 nd Floor 25 San Francisco, CA 26 27 A-;

28 t' LAI :#6227068v4

/420/

Declaration of Robert Jay Moore re Second Interim Application

1 I, Robert Jay Moore, declare:

2

1. I am over eighteen years of age and, if called upon, I could and would 3

testify competently to the matters set forth herein. I am a partner in the law firm of Milbank, 4

Tweed, Hadley & McCloy LLP ("Milbank"), counsel for the Official Committee of Unsecured 5

Creditors ("Committee") in the Pacific Gas and Electric Company ("PG&E" or "Debtor")

6 chapter 11 case (the "Case"), and I am one of the attorneys responsible for Milbank's 7

representation of the Committee in the Case. In preparing this Declaration, I have relied on my 8

personal knowledge and on my review of the billing records and files maintained by Milbank in 9

the ordinary course of its business and represented to have been made by Milbank attorneys, law 10 clerks, legal assistants, case clerks, and staff substantially contemporaneously with each 11 individual's performance of services or incurrence of costs on behalf of the Committee.

12

2. This Declaration is submitted in support of the "Second Interim 13

• 14 *Application of Milbank, Tweed, Hadley & McCloy LLP For Allowance and Payment of 14

• . 15 15 Compensation And Reimbursement of Expenses (August 1, 2001 Through November 30, 2001)"

1 (the "Second Interim Application"). Capitalized terms not otherwise defined herein shall have

• - 16 This Second Interim 17 the meanings ascribed to them in the Second Interim Application.

18 Application covers the period from August 1, 2001 through and including November 30, 2001 and reviewed the 19 (the "Second Application Period"). I have read the Second Interim Application therein is true and 20 exhibits thereto, and to the best of my knowledge each of the facts contained 21 correct.

22 3. Milbank was selected as counsel to the Committee not only because of its 23 expertise and experience in connection with complex bankruptcies and financial reorganizations, 24 particularly those involving significant regulatory and public financing aspects, but also by 25 reason of its expertise and depth of resources in the utility, power and energy, project finance, 26 banking and institutional investment, capital markets, securitization, taxation and litigation 27 practice areas. Because of the breadth and depth of Milbank's experience, the Committee has 28 been able to look to Milbank to provide it with advice, counseling and representation in the wide LAI :#6227068v4 Declaration of Robert Jay Moore re Second Interim Application

1 range of areas of expertise that have been required. As the Committee's sole law firm, Milbank 2 has been able, and required, to interact with the numerous law firms employed for various 3 purposes by PG&E and by the Parent, which is a Plan Proponent, in connection with this 4 engagement. Milbank's capacity has had the benefit of providing great efficiency and savings to 5 its client, the Committee, and to the estate generally.

6 4. The Committee is composed of eleven (11) individual members. In order 7 to more efficiently fulfill its fiduciary duties and facilitate its functions, the Committee 8 established the following working groups: the Litigation Subcommittee; the Finance 9 Subcommittee; the Legislative and Regulatory Subcommittee; and the Plan Working Group.

10 Milbank attempts to provide counsel to each of the Subcommittees and the Plan Working Group 11 through attorneys with expertise and knowledge most pertinent to each working group's areas of

-12 12 designated responsibility and the reports and action items that are agendized for their meetings.

Y 13 S The Subcommittees and Plan Working Group typically report on their activities to the full 14 Committee at periodic meetings held by telephone conference call or in person in San Francisco, 15 frequently in conjunction with direct in-person meetings with PG&E's senior management.

S 16 Milbank believes that through its internal division of responsibility and the Subcommittee 2 17 structure, the Committee, and the estate, have received the benefit of efficient and effective 18 delivery of legal services.

19

5. Given the broad range of responsibilities and intense time pressures 20 imposed on Milbank at the outset of the Case, Milbank determined to staff the matter in a 21 manner that would maximize its efficiency. For this reason, financial restructuring partner Paul 22 Aronzon assumed primary responsibility for intra-Committee communications and coordination 23 of the Plan formulation and revision process with the Committee's financial advisors and PG&E 24 and its advisors. I, also a financial restructuring partner, focused on the Bankruptcy Court 25 pleading and appearance process, and more recently Disclosure Statement approval and Plan 26 confirmation issues and process, and spearheaded the interface with PG&E and its counsel 27 regarding the settlement dialogue process with respect to contested matters. Energy regulatory 28 LAI :#6227068v4 Declaration of Robert Jay Moore re Second Interim Application

1 partner Ed Feo has focused on analysis of FERC and CPUC proceedings and the California 2 legislative process as they relate to PG&E's operations, strategies and Plan formulation. Energy 3 finance partner Allan Marks has focused on analysis of PG&E's financing structures, the 4 prospective CDWR bond financing and PG&E's exit financing. Litigation partner Michael 5 Diamond assumed primary responsibility for Milbank's participation in adversary proceedings 6 and non-bankruptcy court litigation matters. Within this framework, Milbank attempts to 7 minimize its charges by, among other things: (a) attending -Bankruptcy Court hearings by 8 telephone conference call, when appropriate; (b) monitoring proceedings before the FERC, the 9 CPUC, the California Legislature, the United States Congress, and other tribunals or other 10 agencies via the Internet, when possible and appropriate; and (c) generally having only those 11 attorneys primarily responsible for particular matters attend hearings or other proceedings.

a 12 Because the Committee has been able to rely on Milbank's breadth of expertise in lieu of 13 employing multiple law firms with different skill sets, more than one Milbank partner may attend 14 Committee, Subcommittee, Working Group or other meetings where that partner's expertise or 15 knowledge base provides an important underpinning to the negotiation or deliberation process.

16 6. In the ordinary course of its practice, Milbank maintains records of time S 17 expended by attorneys, law clerks, legal assistants, and case clerks in rendering services to its 18 clients, including the Committee. Time records are made substantially contemporaneously with 19 the rendition of these professional services and are prepared by the attorneys, law clerks, legal 20 assistants, and case clerks who have rendered the services. In matters such as this representation, 21 time records are kept in six minute (.1 hour1.157407e-5 days <br />2.777778e-4 hours <br />1.653439e-6 weeks <br />3.805e-7 months <br />) increments. With regard to intra-office conferences, 22 at times no attorney, or a single attorney, may bill for the conference. It is impossible to state 23 with precision how much time has not been recorded by Milbank's professionals as a result of 24 this practice.

25

7. In view of the implications for the citizens of California of the California 26 energy crisis in general and the Case in particular, at the outset of this engagement, and without 27 request or demand by any party, Milbank voluntarily elected to reduce the hourly rates of its 28 LAL :#6227068v4

-3 Declaration of Robert Jay Moore re Second Interim Application

1 most senior attorneys to $595, a reduction of up to $80 per hour from the rates normally charged 2 by these attorneys. Additionally, in reviewing its monthly pre-bills before submission to the U.S.

3 Trustee and PG&E, Milbank voluntarily elected not to bill for certain time recorded by various 4 attorneys, law clerks, paralegals, legal assistants and case clerks relating, among other things, to 5 duplicative attendance at hearings, certain monitoring of regulatory hearings and proceedings, 6 document retrieval and file organization. These rate and billing reductions during the Second 7 Interim Period total $72,615.00. Additionally, in order to comply with the UST Guidelines and 8 the Court Guidelines, Milbank either has not sought or has reduced its request for reimbursement 9 of expenses in the total amount of $29,805.57. Accordingly, Milbank has voluntarily reduced 10 the fees and costs it normally would charge during the Second Application Period by almost 11 $102,420.57.

12 8. In addition to these voluntary reductions, in accordance with the Court's S 13 Memorandum Decision, Milbank has reduced the hourly rate for the PG&E Case Clerk from 14 $100 per hour to $40 per hour, yielding a reduction of $18,366.00. Milbank has also written-off

• o 15 101.30 hours3.472222e-4 days <br />0.00833 hours <br />4.960317e-5 weeks <br />1.1415e-5 months <br /> spent in connection with supplementing the Second Interim Application, yielding a z - 16 fee reduction of $49,973.50. Moreover, Milbank has written-off all non-working travel time pre S 17 September 11, 2001 and has written down non-working travel time to a maximum of two (2) 18 hours each way for travel after September 11, 2001. These write-offs have resulted in an 19 additional reduction of 23.10 hours1.157407e-4 days <br />0.00278 hours <br />1.653439e-5 weeks <br />3.805e-6 months <br /> during the Second Application Period, translating in a fee 20 reduction of $11,452.50. Accordingly, Milbank has reduced its fees and costs during the Second 21 Application Period by $182,212.57.

22

9. The document "Milbank, Tweed, Hadley & McCloy LLP's Time Records 23 Exhibit for the Period August 1, 2001 to November 30, 2001," filed concurrently herewith, 24 attaches true and correct copies of records maintained by Milbank in the ordinary course of 25 Milbank's business operations and reflects entries that were made substantially 26 contemporaneously with the rendering of the services. All of the work performed by Milbank 27 was authorized by the Committee.

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-4 Declaration of Robert Jay Moore re Second Interim Application

1 10. Pursuant to the Second Interim Application, Milbank seeks allowance of 2 compensation for 3,973.85 hours9.837963e-4 days <br />0.0236 hours <br />1.405423e-4 weeks <br />3.23425e-5 months <br /> of recorded professional time devoted to representing the 3 Committee during the Second Interim Period in the Case, resulting in the accrual of 4 $1,690,874.00 in fees for professional services rendered. Pursuant to the Second Interim 5 Application, Milbank also seeks approval for the reimbursement of $116,651.11 in costs and 6 expenses incurred during the Second Application Period, for a total allowance of fees and costs 7 and expenses of $1,807,525.11.

8 11. Milbank received no pre-petition retainer in connection with this Case.

9

12. Milbank has submitted monthly fee notices in accordance with the interim 10 fee procedures that were established by the Court for the period covering August 1, 2001 through 11 November 30, 2001. Milbank has received payment totaling $1,221,652.74 in connection with 12 the Monthly Cover Sheet Applications covering the period of August 1,2001 through 13 October 31, 2001.

14

" 15*

• '15 13. No agreement or understanding of any kind or nature exists between Milbank and any other person or entity for the sharing, division, or payment of any portion of the 16 z

17 compensation awarded to Milbank S17 for services rendered or expenses incurred in connection with 18 Milbank's representation of the Committee in this Case, except as among the partners, associates 19 and employees of Milbank.

20 14. I am one of the designated professionals responsible for overseeing the 21 billing in this matter and for assuring compliance with the Guidelines of the Office of the United 22 States Trustee for the Northern District of California relating to billing (the "Guidelines").

23 Based upon my review of the Second Interim Application submitted by Milbank for the Second 24 Application Period, I believe that the Second Interim Application complies with the Court 25 Guidelines and the UST Guidelines.

26 15. Attached hereto as Exhibit "1" is a summary of the total hours expended 27 and fees incurred by each Milbank professional, as well as a categorized summary of expenses 28 LAI :#6227068v4

-5 Declaration of Robert Jay Moore re Second Interim Application

1 incurred, during the Second Application Period.

2 16. Attached hereto as Exhibit "2" is a summary of each category of services, 3 setting forth the name of each professional who expended time in that category and the total 4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br /> and amount billed by each professional in that category during the Second Application 5 Period.

6

17. Attached hereto as Exhibit "3" is a chart showing billing rates for each 7

Milbank professional in effect during the Second Application Period.

8 9 18. Attached hereto as Exhibit "4" is a true and complete copy of 10 correspondence from me to Clara Yang Strand and Kenneth E. Smith, the Committee's Co Chairs, dated February 14, 2002.

12 19. In connection with the recent chapter 11 bankruptcy filing of Enron Corp.

,.2 2 13 and certain of its affiliates ("Enron") in the United States Bankruptcy Court for the Southern 14 District of New York, Case No. 01-16034 (AJG) (the "Enron Bankruptcy Case"), Milbank has 15 been selected as counsel to the Official Committee of Unsecured Creditors (the "Enron z

16 Committee"). An application to employ Milbank as counsel to the Enron Committee will be

-9 17 filed shortly.

18 20. Milbank has set up an "information firewall" between the attorneys 19 assigned to the PG&E Committee representation and the lawyers working on the representation 20 of the Enron Committee. No Milbank attorney who had material involvement (more than 10 21 hours2.430556e-4 days <br />0.00583 hours <br />3.472222e-5 weeks <br />7.9905e-6 months <br /> of time) in the representation of the PG&E Committee will advise the Enron Committee 22 with respect to any matter. Likewise, no Milbank attorney who had material involvement (more 23 than 10 hours1.157407e-4 days <br />0.00278 hours <br />1.653439e-5 weeks <br />3.805e-6 months <br /> of time) in the representation of the Enron Committee will advise the PG&E 24 Committee with respect to any matter. Milbank will review the firewall on a monthly basis to 25 ensure that it is current and that there has been no breach.

26

21. Out of an abundance of caution, Milbank will not participate in any 27 proceedings in the PG&E Bankruptcy Case that relate to claims brought by or against Enron.

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-6 Declaration of Robert Jay Moore re Second Interim Application

1 22. With regard to recently appointed Committee member Reliant Resources, 2 Inc. ("Reliant"), Milbank has conducted a conflicts search. The conflicts search indicates that 3 Milbank has not represented Reliant in the past. Milbank has represented other clients in 4 transactions in which Reliant was a participating party, such as:

5 .(a) Milbank's representation of Fortis Bank in financing on a Texas energy 6 project which sold power to Reliant Energy, Inc.;

7 (b) Milbank's representation of Donaldson Lufkin & Jenrett Securities 8

Corporation as arranger in an offering by Investor Trust, which was to contribute proceeds of the 9

offering to an investment trust owned 50% by Reliant Energy, Inc.;

10 11 (c) Milbank's representation of Citibank, N.A., as agent for a credit agreement in 12, connection with a project sponsored by Reliant Energy, Inc.;

>- 12 Y

C.)

13 (d) Milbank's representation of HoustonStreet.com in a reorganization, in which 14 Reliant Energy, Inc. was a co-venturer;

<z. 1 15 (e) Milbank's representation of Bank of America in a financing of a cogeneration 16 z

16 facility owned by Reliant Energy Channelview LP; 17 S17 (f) Milbank's representation of JP Morgan/Chase in connection with analysis of 18 certain litigation filed against, among others, Reliant Energy, Inc.; and 19 in connection 20 (g) Milbank's representation of Enron Wholesale Services, Inc.

Energy Services, Inc.

21 with its agreements with a number of parties, including Reliant 22 I declare under penalty of perjury under the laws of the United States of America 23 that the foregoing is true and correct.

24 Executed this/2 ¢' day of January, 2002 at Los Angeles, California.

25 26Robert Jay Moore/

27 28 LAI :#6227068v4

-7 Declaration of Robert Jay Moore re Second Interim Application

EXHIBIT "1" Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 658.15 595 391,599.25 Michael H. Diamond Partner 10.80 595 6,426.00 Edwin F. Feo Partner 184.40 595 109,718.00 Robert Jay Moore Partner 457.00 595 271,915.00 Simon Friedman Partner 17.00 575 9,775.00 Neil J. Wertlieb Partner 1.50 525 787.50 Thomas R. Kreller Partner 4.20 450 1,890.00 Allan T. Marks Partner 198.70 450 89,415.00 Thomas R. Kreller Partner 27.90 420 11,718.00 1,559.65 $893,243.75 Steven M. Kramer Of Counsel 207.30 470 97,431.00 Orlan M. Johnson Of Counsel 1.50 420 630.00 208.80 $98,061.00 Fred Neufeld Associate 91.90 435 39,976.50 Michael Dayen Associate 120.60 420 50,652.00 Taline Grigorian Associate 50.70 420 21,294.00 Michael I. Sorochinsky Associate 633.60 420 266,112.00 David B. Zolkin Associate 8.20 420 3,444.00 Kevin R. Mc Spadden Associate 380.90 415 158,073.50 Sabina Bhalla Associate 14.50 385 5,582.50 Chandra L. Gooding Associate 0.50 385 192.50 Carla J. Urquhart Associate 71.90 385 27,681.50 Ines M. Cho Associate 22.40 350 7,840.00 Lorie A. Ball Associate 119.60 295 35,282.00 Roger S. Chae Associate 92.90 295 27,405.50 Brian I. Hamblet Associate 14.10 295 4,159.50 John G. Ha Associate 46.10 200 9,220.00 Jaime J. Rodriguez Associate 16.20 200 3,240.00 1,684.10 $660,155.50

Susan Kim Summer Associate 8.50 160 1,360.00 David Levine Summer Associate 20.00 160 3,200.00 Francisco Ochoa Summer Associate 3.75 160 600.00 Aaron Renenger Summer Associate 15.00 160 2,400.00 Talis Seja Summer Associate 2.00 160 320.00 49.25 $7,880.00 Lee K. Noller Legal Assistant 2.20 135 297.00 Kyle J. Olson Legal Assistant 0.10 125 12.50 Ryan M. Rupe Legal Assistant 1.70 125 212.50 Beth A. Passage Legal Assistant 130.60 100 13,060.00 134.60 $13,582.00 Case Clerk Pg&e Case Clerk 306.10 40 12,244.00 306.10 $12,244.00 James M. Schwarz Other 30.20 185 5,587.00 30.20 $5,587.00 Orlando Villanueva Other 1.15 105 120.75 1.15 $120.75 Total Hours and Fees Billed 3973.85 $1,690,874.00

Summary of Disbursements Billed Description Amount Copying $26,494.95 Court Fees $3,907.90 Delivery Services/Messengers $1,793.11 Meals For Meetings $1,062.22 Online Research $22,094.43 Court/Clerical Services $3,257.89 Docurment/Retrieval/Reproduction $3,227.40 Out-of-Town Travel $23,639.99 Telephone $31,173.22 Total Disbursements Billed $116,651.11

EXHIBIT "2" PG&E-ASSET ANALYSIS AND RECOVERY Summary of Hours Billed Timekeeper Position Hours Rate Amount Robert Jay Moore Partner 14.10 595 8,389.50 Allan T. Marks Partner 7.90 450 3,555.00 22.00 $11,944.50 Michael Dayen Associate 113.60 420 47,712.00 Michael I. Sorochinsky Associate 4.60 420 1,932.00 Carla J. Urquhart Associate 3.70 385 1,424.50 121.90 $51,068.50 Talis Seja Summer Associate 2.00 160 320.00 2.00 $320.00 Kyle J. Olson Legal Assistant 0.10 125 12.50 0.10 $12.50 Total Hours and Fees Billed 146.00 $63,345.50

PG&E-BUSINESS OPERATIONS Summary of Hours Billed Timekeeper Position Hours Rate Amount Robert Jay Moore Partner 26.90 595 16,005.50 Thomas R. Kreller Partner 0.60 420 252.00 27.50 $16,257.50 Fred Neufeld Associate 17.70 435 7,699.50 Michael I. Sorochinsky Associate 19.20 420 8,064.00 36.90 $15,763.50 Total Hours and Fees Billed 64.40 $32,021.00

PG&E-ASSET DISPOSITION (EXECUTORY CONTRACTS)

Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 5.50 595 3,272.50 Edwin F. Feo Partner 2.90 595 1,725.50 Robert Jay Moore Partner 35.00 595 20,825.00 Allan T. Marks Partner 0.40 450 180.00 Thomas R. Kreller Partner 4.20 420 1,764.00 48.00 $27,767.00 Fred Neufeld Associate 1.00 435 435.00 Taline Grigorian Associate 44.50 420 18,690.00 Michael I. Sorochinsky Associate 35.40 420 14,868.00 Kevin R. Mc Spadden Associate 31.80 415 13,197.00 Ines M. Cho Associate 19.20 350 6,720.00 John G. Ha Associate 3.60 200 720.00 135.50 $54,630.00 Susan Kim Summer Associate 8.50 160 1,360.00 David Levine Summer Associate 20.00 160 3,200.00 Francisco Ochoa Summer Associate 3.75 160 600.00 Aaron Renenger Summer Associate 15.00 160 2,400.00 47.25 $7,560.00 Beth A. Passage Legal Assistant 0.90 100 90.00 0.90 $90.00 James M. Schwarz Other 2.50 185 462.50 2.50 $462.50 Total Hours and Fees Billed 234.15 $90,509.50

PG&E-CASE ADMINISTRATION/U.S. TRUSTEE, COMPLIANCE Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 16.00 595 9,520.00 Robert Jay Moore Partner 57.90 595 34,450.50 Thomas R. Kreller Partner 2.20 450 990.00 Allan T. Marks Partner 3.00 450 1,350.00 Thomas R. Kreller Partner 21.40 420 8,988.00 100.50 $55,298.50 Fred Neufeld Associate 33.80 435 14,703.00 Michael Dayen Associate 3.50 420 1,470.00 Michael I. Sorochinsky Associate 92.70 420 38,934.00 David B. Zolkin Associate 0.20. 420 84.00 Sabina Bhalla Associate 14.50 385 5,582.50 Carla J. Urquhart Associate 0.40 385 154.00 Ines M. Cho Associate 3.20 350 1,120.00 148.30 $62,047.50 Lee K. Noller Legal Assistant 2.20 135 297.00 Beth A. Passage Legal Assistant 22.40 100 2,240.00 24.60 $2,537.00 Case Clerk Pg&e Case Clerk 306.10 40 12,244.00 306.10 $12,244.00 Total Hours and Fees Billed 579.50 $132,127.00

PG&E-CLAIMS ADMINISTRATION AND OBJECTIONS Summary of Hours Billed Timekeeper Position Hours Rate Amount Robert Jay Moore Partner 22.20 595 13,209.00 Thomas R. Kreller Partner 0.50 420 210.00 22.70 $13,419.00 Fred Neufeld Associate 18.40 435 8,004.00 Michael I. Sorochinsky Associate 23.90 420 10,038.00 John G. Ha Associate 0.20 200 40.00 42.50 $18,082.00 Beth A. Passage Legal Assistant 0.30 100 30.00 0.30 $30.00 Total Hours and Fees Billed 65.50 $31,531.00

PG&E-FEE/EMPLOYMENT APPLICATION Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 13.90 595 8,270.50 Michael H. Diamond Partner 0.80 595 476.00 Edwin F. Feo Partner 2.40 595 1,428.00 Robert Jay Moore Partner 50.70 595 30,166.50 Allan T. Marks Partner 2.00 450 900.00 Thomas R. Kreller Partner 0.80 420 336.00 70.60 $41,577.00 Steven M. Kramer Of Counsel 2.20 470 1,034.00 2.20 $1,034.00 Fred Neufeld Associate 4.50 435 1,957.50 Michael I. Sorochinsky Associate 113.70 420 47,754.00 Kevin R. Mc Spadden Associate 4.30 415 1,784.50 122.50 $51,496.00 Beth A. Passage Legal Assistant 86.10 100 8,610.00 86.10 $8,610.00 James M. Schwarz Other 1.50 185 277.50 1.50 $277.50 Total Hours and Fees Billed 282.90 $102,994.50

PG&E-FEEIEMPLOYMENT OBJECTIONS Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 3.10 595 1,844.50 Edwin F. Feo Partner 6.20 595 3,689.00 Robert Jay Moore Partner 10.50 595 6,247.50 Thomas R. Kreller Partner 0.40 420 168.00 20.20 $11,949.00 Michael I. Sorochinsky Associate 19.20 420 8,064.00 19.20 $8,064.00 Beth A. Passage Legal Assistant 7.10 100 710.00 7.10 $710.00 Total Hours and Fees Billed 46.50 $20,723.00

PG&E-STAY LITIGATION Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 2.20 595 1,309.00 Robert Jay Moore Partner 19.90 595 11,840.50 22.10 $13,149.50 Fred Neufeld Associate 6.20 435 2,697.00 Michael I. Sorochinsky Associate 71.10 420 29,862.00 Kevin R. Mc Spadden Associate 21.60 415 8,964.00 98.90 $41,523.00 Beth A. Passage Legal Assistant 0.50 100 50.00 0.50 $50.00 Total Hours and Fees Billed 121.50 $54,722.50

PG&E-OTKER LITIGATION Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 3.60 595 2,142.00 Michael H. Diamond Partner 10.00 595 5,950.00 Robert Jay Moore Partner 19.60 595 11,662.00 Allan T. Marks Partner 1.30 450 585.00 34.50 $20,339.00 Fred Neufeld Associate 1.00 435 435.00 Michael I. Sorochinsky Associate 36.60 420 15,372.00 Kevin R. Mc Spadden Associate 8.80 .415 3,652.00 Chandra L. Gooding Associate 0.50 385 192.50 Roger S. Chae Associate 2.40 295 708.00 49.30 $20,359.50 Ryan M. Rupe Legal Assistant 0.50 125 62.50 Beth A. Passage Legal Assistant 3.00 100 300.00 3.50 $362.50 Total Hours and Fees Billed 87.30 $41,061.00

PG&E-MEETING OF CREDITORS Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 11.60 595 6,902.00 Edwin F. Feo Partner 14.80 595 8,806.00 Robert Jay Moore Partner 30.40 595 18,088.00 Allan T. Marks Partner 6.50 450 2,925.00 63.30 $36,721.00 Michael I. Sorochinsky Associate 0.10 420 42.00 Kevin R. Mc Spadden Associate 3.50 415 1,452.50 3.60 $1,494.50 Total Hours and Fees Billed 66.90 $38,215.50

PG&E-PLAN & DISCLOSURE STATEMENT Summary of Hours Billed Timekeeper Position Hours Rate Amount Paul S. Aronzon Partner 602.25 595 358,338.75 Edwin F. Feo Partner 5.00 595 2,975.00 Robert Jay Moore Partner 153.40 595 91,273.00 Simon Friedman Partner 10.70 575 6,152.50 Neil J. Wertlieb Partner 1.50 525 787.50 Thomas R. Kreller Partner 2.00 450 900.00 Allan T. Marks Partner 90.30 450 40,635.00 865.15 $501,061.75 Steven M. Kramer Of Counsel 12.40 470 5,828.00 12.40 $5,828.00 Fred Neufeld Associate 9.30 435 4,045.50 Michael Dayen Associate 3.50 420 1,470.00 Taline Grigorian Associate 6.20 420 2,604.00 Michael I. Sorochinsky Associate 216.80 420 91,056.00 David B. Zolkin Associate 8.00 420 3,360.00 Kevin R. Mc Spadden Associate 3.80 415 1,577.00 Lorie A. Ball Associate 119.60 295 35,282.00 Brian I. Hamblet Associate 14.10 295 4,159.50 John G. Ha Associate 4.70 200 940.00 386.00 $144,494.00 Ryan M. Rupe Legal Assistant 1.20 125 150.00 Beth A. Passage Legal Assistant 10.30 100 1,030.00 11.50 $1,180.00 Orlando Villanueva Other 1.15 105 120.75 1.15 $120.75 Total Hours and Fees Billed 1276.20 $652,684.50

PG&E-BUSINESS ANALYSIS Summary of Hours Billed Timekeeper Position Hours Rate Amount Robert Jay Moore Partner 14.40 595 8,568.00 14.40 $8,568.00 Michael I. Sorochinsky Associate 0.30 420 126.00 0.30 $126.00 James M. Schwarz Other 1.00 185 185.00 1.00 $185.00 Total Hours and Fees Billed 15.70 $8,879.00

PG&E-TAX ISSUES Summary of Hours Billed Timekeeper Position Hours Rate Amount Simon Friedman Partner 6.30 575 3,622.50 6.30 $3,622.50 Total Hours and Fees Billed 6.30 $3,622.50

PG&E-NON-WORKING TRAVEL Summary of Hours Billed Timekeeper Position Hours Rate Amount Edwin F. Feo Partner 1.40 595 833.00 Robert Jay Moore Partner 2.00 595 1,190.00 Allan T. Marks Partner 3.00 450 1,350.00 6.40 $3,373.00 Kevin R. Mc Spadden Associate 2.00 415 830.00 2.00 $830.00 Total Hours and Fees Billed 8.40 $4,203.00

PG&E-FEDERAL REGULATORYIFERC Summary of Hours Billed Timekeeper Position Hours Rate Amount Edwin F. Feo Partner 19.60 595 11,662.00 Allan T. Marks Partner 1.00 450 450.00 20.60 $12,112.00 Steven M. Kramer Of Counsel 40.00 470 18,800.00 40.00 $18,800.00 Kevin R. Mc Spadden Associate 2.10 415 871.50 Carla J. Urquhart Associate 22.10 385 8,508.50 Roger S. Chae Associate 51.10 295 15,074.50 75.30 $24,454.50 Total Hours and Fees Billed 135.90 $55,366.50

PG&E-STATE REGULATORYICPUC Summary of Hours Billed Timekeeper Position Hours Rate Amount Edwin F. Feo Partner 30.60 595 18,207.00 Allan T. Marks Partner 33.80 450 15,210.00 64.40 $33,417.00 Kevin R. Mc Spadden Associate 220.50 415 91,507.50 Roger S. Chae Associate 39.40 295 11,623.00 John G. Ha Associate 14.60 200 2,920.00 Jaime J. Rodriguez Associate 16.20 200 3,240.00 290.70 $109,290.50 Total Hours and Fees Billed 355.10 $142,707.50

PG&E-REGULATORY PLAN IMPLEMENTATIONICONSUMMATION Summary of Hours Billed Timekeeper Position Hours Rate Amount Edwin F. Feo Partner 95.60 595 56,882.00 Allan T. Marks Partner 32.00 450 14,400.00 127.60 $71,282.00 Steven M. Kramer Of Counsel 152.70 470 71,769.00 Orlan M. Johnson Of Counsel 1.50 420 630.00 154.20 $72,399.00 Kevin R. Mc Spadden Associate 33.90 415 14,068.50 Carla J. Urquhart Associate 45.70 385 17,594.50 John G. Ha Associate 23.00 200 4,600.00 102.60 $36,263.00 Total Hours and Fees Billed 384.40 $179,944.00

PG&E-LEGISLATIVE Summary of Hours Billed Timekeeper Position Hours Rate Amount Edwin F. Feo Partner 5.90 595 3,510.50 Allan T. Marks Partner 17.50 450 7,875.00 23.40 $11,385.50 Kevin R. Mc Spadden Associate 48.60 415 20,169.00 48.60 $20,169.00 James M. Schwarz Other 25.20 185 4,662.00 25.20 $4,662.00 Total Hours and Fees Billed 97.20 $36,216.50

EXHIBIT "3" EXHIBIT "3" Hourly Billing Rates of Milbank Attorneys and Legal Assistants Partners Paul Aronzon $595 Edwin Feo $595 Robert Moore $595 Michael Diamond $595 Simon Friedman $575 Neil J. Wertlieb $525 Thomas R. Kreller $450 Allan T. Marks $450 Thomas R. Kreller $420 Of Counsel Steven Kramer $470 Orlan M. Johnson $420 Associates Fred Neufeld $435 Michael Dayen $420 Taline Grigorian $420 Michael I. Sorochinsky $420 David B. Zolkin $420 Kevin R. McSpadden $415 Sabina Bhalla $385 Chandra L. Gooding $385 Carla J. Urquhart $385 Ines M. Cho $350 Lori A. Ball $295 Roger S. Chae $295 Brian I. Hamblet $295 John G. Ha $200 Jaime J. Rodriguez $200 Summer Associates Susan Kim $160 David Levine $160 Francisco Ochoa $160 Aaron Renenger $160 Talis Seja $160 Legal Assistants Lee K. Noller $135 Kyle J. Olson $125 Ryan M. Rupe $125 Beth A. Passage $100 Miscellaneous James M. Schwarz $185 Orlando Villanueva $105 PG&E Case Clerk $ 40

EXHIBIT "4" MILBANK, TWEED, HADLEY & MCGLOY LLP 601 SOUTH FIGUEROA STREET NEW YORK FRANKFURT THIRTIETH FLOOR 212-530-5000 49-69-7593-7170 FAX: 212-530-5219 FAX: 49-69-7593-8303 LOS ANGELES, CA 90017-5735 WASHINGTON, D.C. TOKYO 202-835-7500 813-3504-1050 213-892-4000 FAX: 813-3595-2790 FAX: 202-835-7586 FAX: 213-629-5063 PALO ALTO HONG KONG 852-2971-4888 650-739-7000 FAX: 85 -2840-0792 FAX: 650-739-7100 LONDON SINGAPORE 65-428-2400 44-171-448-3000 FAX: 44-171-448-3029 FAX: 65-428-2500 January 12, 2002 VIA FEDERAL EXPRESS Clara Yang Strand Kenneth E. Smith Managing Director Senior Asset Manager Bank of America, N.A. Delta Power Company, LLC CA 9-706-11-21 2100 Santiago Drive 555 South Flower Street, 1 1th Floor Newport Beach, CA 92660 Los Angeles, California 90071-2385 Re: Pacific Gas & Electric Company

Dear Clara and Ken:

Enclosed for your review is the (i) Second Interim Application of Milbank, Tweed, Hadley & McCloy LLP for Allowance of Payment of Compensation and Reimbursement of Expenses (August 1, 2001 through November 30, 2001); (ii) Declarations of Robert Jay Moore and Edwin E. Feo in support thereof; and (iii) Milbank, Tweed, Hadley & McCloy LLP's Time Records Exhibit for the Period August 1, 2001 through November 30, 2001.

The Court's Guidelines for Compensation and Expense Reimbursement of Professionals and Trustees provide that a debtor in possession, a trustee or an official committee must exercise reasonable business judgment in monitoring fees and expenses of the estate's professionals. We invite you to discuss any objections, concerns or questions you may have with us. The Office of the United States Trustee will also accept your comments. The Court will also consider timely filed objections by any party in interest at the time of the hearing.

Thank you.

Very truly yours, Robert Jay Moore RJM:bap Enclosures cc: Paul S. Aronzon, Esq. (w/o encl.)

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