ML020430419

Second Interim Application for Compensation and Expense Reimbursement by Cooley Godward Llp, Special Counsel (August 1, 2001 Through November 30, 2001)

ML020430419
Person / Time
Site:	Diablo Canyon
Issue date:	01/14/2002
From:	Joseph Kelly Cooley Godward, LLP, Pacific Gas & Electric Co
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
01-30923 DM, 94-0742640
Download: ML020430419 (8)

Text

2 COOLEY GODWARD LLP STEPHEN C. NEAL (170085)

MARTIN S. SCHENKER (109828)

I 2 I. INTRODUCTION

1. Debtor: On April 6, 2001 ("Petition Date"), Debtor filed a voluntary petition under J. MICHAEL KELLY (133657) 3 Chapter I I of the Bankruptcy Code.

3 GREGG S. KLEINER (141311)

One Maritime Plaza, 20th Floor 4 2. Employment: On May 8,2001 and as amended on September 13, 2001, the Court 4 San Francisco, CA 94111-3580 Telephone: (415) 693-2000 5 authorized the Debtor to employ the law firm of Cooley Godward LLP ("Applicant"), as its special 5 Facsimile: (415) 951-3699 6 counsel herein ("Employment Order"), effective as of the Petition Date. A copy of the Employment 6 Special Counsel for Debtor PACIFIC GAS and ELECTRIC COMPANY 7 Order is attached as Exhibit A to the Declaration of Martin S. Schenker in Support of Cooley 7

8 Godward LLP's Second Interim Application for Compensation and Expense Reimbursement 8 UNITED STATES BANKRUPTCY COURT 9 ("Schenker Declaration").

9 NORTHERN DISTRICT OF CALIFORNIA 10 3. Prior Compensation: On or about October 23, 2001, the bankruptcy Court approved 10 SAN FRANCISCO DIVfSION:

II Applicant's First Interim Application for Compensation and Expense Reimbursement (April 6, 2001 11 In re Chapter I1 12 July 31,2001). Pursuant to that order Applicant was paid by the Debtor $294,349.00 in fees and 12 PACIFIC GAS and ELEC TRIC Case No. 01 -b923D M COMPANY, a California Corporation,. 13 reimbursed the sum of $10,856.04 in expenses. In addition to those amounts and in conformity with 13 SECOND INTERIM APPLICATION FOR Debtor COMPENSATION, ANDEXPENSE 14 the Interim Fee Ordiir' through January 14,*2002, Applicant has been paid the additional sum of 14 REIMBURSEMENT BY COOLEY GODWARD LLP, Federal I.D. No. 94-0742(640 SPECIAL COUNSEL Is $657,429.11, representing 85% of fees'incurred from August 1, 2001 through October 30,2001 and 15 (August 1, 2001 through November 30, 2001) 16 reimbursed approximately $49,648.95, representing 100% of expenses incurred from August 1,2001 16 Date: February 26, 2002 Time:. 9:30 a.m. . 17 through October 30, 2001;,with a hold back of$l 16,016.89 ("Holdback"). Pursuant to the terms of 17 Place: 235 Pine Street, 1 9ih Floor S. San Francisco. CA 941.04 18 the Interim Fee Order, Applicant has not yet received payment of fees and expenses for its November 18 Judge: Dennis Monitali 19 2001 invoices.

19 20 4. Current Compensation: This is the Second Application for Interim Compensation and 20 To THE HONORABLE DENNIS MONTALI, UNITED STATES BANKRUPTCYJUDGE:

21 Expense Reimbursement ("Application"). By this Application, Applicant requests interim 21 Pursuant to the Court's Order Establishing Interim Fee Application and Expense 22 compensation in the amount of $928,769.25' and expense reimbursement in the sum of $52,714.202, 22 Reimbursement dated July 26, 2001, as amended on November 8, 2001 ("Interim Fee Order"),

23 which sums do not take into account the interim payments received pursuant to the Interim Fee Order Rule 23 Sections 330:and 331 of Title II of the United States Bankruptcy Code ("Banikcptcy Code"),

24 as described above. During the course of representing the Debtor from August 1, 2001 through the :.

24 2016 of the Federal Rules of Bankruptcy Procedures, and the Bankruptcy Local Rules for 25 Gas and 25 Northern District of California, Cooley Godward LLP, special counsel for debtor Pacific The total amount of fees is $934,133.75. However, in compliance with the U.S. Trustee's Guidelines regarding 26 Travel, Applicant has deducted $5,364.50 (one-half of the Travel fee amount) from the total amount of fees and is 26 Electric Company ("Debtor") files this Second Interim Application for Compensation and Expense requesting fees of $928,769.25.

27 The total amount of expenses is$54;930.54. However, incompliance with U.S. Trustee's Guidelines regarding 27 Reimbursement ("Application") and respectfully represents: Word Processing, Applicant isdeducting $2,216.34 from the total amount ofexpenses and is requesting expenses of 28

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November 30,2001 ("Second Interim Period"), Applicant performed the services described in this I served monthly Notice Cover Sheet Applications for the months of August, September, October 2 Application and the time summaries attached to the Schenker Declaration, and summarized in the 2 and November 2001, reviewed applicable guidelines and orders in connection with this, adjusted 3 statements set forth in Exhibits A and B attached to the "Time Records Exhibit for the Period 3 and organized its monthly statements in accordance with such guidelines, collected documentation 4 August 1, 2001 to November 30, 2001 by Cooley Godward LLP,.Special Counsel" (hereinafter, 4 necessary for the Application, and began preparing this Application and the supporting 5 "Time Records Exhibit"). Applicant also incurred the actual and necessary expenses itemized in the 5 verification..

6 attached expense itemization as set forth in Exhibits B and C attached to the Time Records Exhibit. 6 . For its.services related to the above services, Applicant spent 119.60 hours6.944444e-4 days <br />0.0167 hours <br />9.920635e-5 weeks <br />2.283e-5 months <br />, incurring 7 5. Compliance with Guidelines: As a general rule, Applicant's billing practices and 7 fees in the sum of $36,106.50 during the Second Interim Period.

8 hourly rates are identical for bankruptcy and non-bankruptcy clients.- The expenses charged to 8 D. Litigation 9 bankruptcy clients are either identical to or less than the expenses charged to non-bankruptcy clients. 9 BFM Claim:

10 6. 2016 Compensation Statement: Applicant has agreed not'to share any compensation 10 Applicant represents the Debtor in connection with Debtor's claims against the State 11 11 of California arising. from the .State's seizure of wholesale electricity contracts, known as Block awarded with any other person and the source of any award authorized will be estate funds.

12 1t. CURRENT SERVICES 12 Forward Market Contracts ("BFM Contracts"). On or about January 31, 2001, Governor Gray 13 A. Summary 13 Davis, acting pursuant to an earlier declaration of emergency, issued an Executive Order seizing 14 The services rendered by Applicant during the Second Interim Period can be 14 the BFM Contracts. from Debtor. These contracts gave Debtor the right to purchase electricity on 3 various future dates at fixed prices. When the wholesale price of electricity skyrocketed in late 15 grouped into the categories set forth below. The attorneys and paraprofessionals who rendered 15 16 services relating to each category are identified, along with the number of hours for each 16 2000, the BFM Contracts entitled Debtor to purchase wholesale electricity at prices far below the 17 individual and the total compensation sought for each category, in Exhibit A attached to the Time 17 then prevailing market prices and, as such, were valuable assets. In addition, the California Power 18 Records Exhibit. 18 Exchange (the "PX'), a non-profit .corporation that until recently administered California's 19 B. Case Administration' -19 wholesale electricity market, along with various electricity generators that sold electricity into that 20 Applicant assisted the Debtor in monitoring -certain aspects of the case as necessary to 20 market, claimed an interest in the BFM Contracts and also asserted claims in connection with the 21 carry out its responsibilities as Special Counsel to the Debtor. 21 State's seizure of these cqntracts.

22 For its services related to the above services, Applicant spent 0.80 hours9.259259e-4 days <br />0.0222 hours <br />1.322751e-4 weeks <br />3.044e-5 months <br />, incurring 22 In March 2001, Debtor and the PX filed claims before the California Victim 23 fees in the sum of $88.00. 23 Compensation and Government Claims Board ("the Board"), an administrative forum that has the 24 C. Fee/Employment Applications 24 stated purpose of .allowing the State an opportunity to investigate and settle claims prior to 25 Applicant reviewed and prepared its monthly fee statements, prepared, filed and 25 litigation. Subsequently, numerous electricity generators who were participants in the PX filed 26 26 separate claims with the Board.. At a May 18, 2001 hearing, the Board indicated it would reject the Applicant is assisting the Debtor in dealing with ongoing, highly sensitive and confidential matters. As a 27 consequence, Applicant is unable to specify in great detail the services it is providing to the Debtor, as doing so 27 claims on the non-substantive ground that the claims were unduly complex and thus more could seriously compromise Debtor's future business and legal strategy. Applicant would be pleased to provide the 28 Court with additional details of the services it is providing to the Debtor its camera or by some other mechanism that 28 appropriately litigated in Superior Court. Consequently, in July 1001, Debtor, the PX and one will ensure the maintenance of Debtor's confidential information.

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electricity generator, Reliant Energy, filed separate inverse condemnation lawsuits. The Debtor identifying, among other things, the amount of money needed to pay for its actual and projected 2 estimates its damages related to the State's seizure of the BFM Contracts at not less than 2 electricity procurement costs; (ii)vests in DWR the California Public Utilities Commission's 3 $240,600,000. 3 ("CPUC's") traditional authority to determine the whether procurement costs and charges are "just and 4 In September 2001, the Board stated that it had elected not to reject the claims and 4 reasonable"; and (iii) entitles DWR to recover its revenue requirement from California ratepayers.

5 indicated that it would proceed with the claims. Applicani assisted the Debtor in the preparation of 5 On May 2, July 23 and August 7,2001, DWR issued three separate revenue 6 a stipulation with PX, Reliant Energy and the State that the claims should be rejected and that the 6 requirements, pursuant to which DWR intends to bind California ratepayers to repay billions of 7 claimants had exhausted their administrative remedies. The Board rejected the stipulation and 7 dollars of DWR's alleged power procurement costs. DWR issued these revenue requirements, and 8 stated that it would proceed on certain, non-dispositive aspects of the claims. Debtor, the PX and 8 determined that they were 'just and reasonable," without providing prior notice to interested parties, 9 certain of the electricity generators advised the Board that it was aciing in excess of its jurisdiction 9 an opportunity to provide comments, or a public hearing on the reasonableness of the DWR's power 10 by continuing the proceedings and engaging in certain other actions, such as authorizing the State 10 purchase costs. If the DWR's revenue requirement is excessive, California ratepayers, including S 11 to conduct discovery. After the Board indicated that it would proceed'notwithstanding the parties' 11 PG&E, will be forced to incur inflated electricity costs. To the extent that DWR's revenue 12 objections, Debtor and the PX filed a writ of mandate and 'request for a stay in Sacramento 12 requirement is not passed on to ratepayers in the form of higher overall retail electricity rates, an 13 Superior Court.'lThe Superior Court granted a temporary stay and a hearing on the writ of mandate 13 inflated revenue requirement will have the effect of diverting funds from Debtor to DWR.

14 is set for January 25, 2002. 14 Applicant-performed services and advised the Debtor in connection with developing a "15 In the meantime, the inversecondemnation lawsuits filed by the Debtor, the PX and 15 strategic plan and analyzing Debtor's legal options with respect to the DWR revenue requirement. On

'16 Reliant Energy were the subject of a motion to coordinate filed by the PX. While the motion to 16 August 21, 2001, Applicant filed in the Sacramento County Superior Court a Petition for Writ of

" " 17 coordinate was pending, the State filed a separate declaratory relief action in Sacramento Superior 17 Mandate Or, in the Alternative, Writ of Administrative Mandamus. This Petition sought a writ

• % "18 Court that also sought a determination regarding the inverse: condemnation claims. All four 18 directing Respondent DWR and Thomas M. Hannigan, its Director, to vacate their decision

. 19 actions have now been coordinated in Sacramento Superior Court. 19 determining DWR's revenue requirement to be just and reasonable.

S" '20 Depending on the outcome of the hearing on Debtor's writ of mandate, the litigation 20 On November 5, 2001, DWR issued the fourth iteration of its revenue requirement,

..." 21 concerning the BFM Contracts could take 18 to twenty-four months orlonger to complete. 21 which reduced the projection of DWR's power costs by more than $3 billion. Notably, this reduction "22 For its services related to the above services,'Applicant spent 568.50 hours5.787037e-4 days <br />0.0139 hours <br />8.267196e-5 weeks <br />1.9025e-5 months <br />, inturing 22 principally resulted from DWR's downward revisions to forecasts of future energy costs. Debtor's 23 fees in the sum"iO-3167,362.50. 23 original petition had challenged these forecasts, alleging that "DWR has substantially overestimated DWR Litigation: 24 the forecast cost of spot power and natural gas purchases,... result[ing] in an overstatement of 24 In early 2001, the California Legislature passed and the:Govemor signed AB Xl, 25 DWR's revenue requirement for the remainder of 2001 and.2002 of roughly $3.1 billion." This 25 which authorized the California Department of Water Resources ("DWR") to enter into contracts for 26 multi-billion reduction directly benefits Debtor by reducing the amount of funds that DWR's actions 26 27 the wholesale purchase of power and to resell that power directly to retail electric customers 27 threaten to divert from Debtor. In its November 5 revenue requirement, however, DWR again refused throughout the State. This new statutory regime (i) authorizes DWR to issue a "revenue requirement" 28 to provide PG&E and others access to information regarding the reasonableness of DWR's power 28 CoosneoowAADc 715254vi/SF , .... 2" INTERIM FEE APPLICATION CootEVGor lO*-tP 715254 vlISF 2" INTERIM FEE APPLICATION 11--A.,m.,

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1 electric generation facili.ty and to connect the new electric generation facility to the Debtor's 1 contracts, any justification concerning the reasonableness ofth ese contracts or any description of 2 Pittsburg substation. In the CalPeak and Delta Matters; the Debtor had granted a revocable license 2 DWR's protocols for negotiating and entering into the contracts.

3 and right of entry to Delta Energy and CalPeak Power, respectively, for preliminary work on the 3 On December 5, Applicant filed an Amended PJelition and Complaint. The Amended 4 projects prior to filing the application for approval of the easements and leases under Section 851.

4 Petition seeks a writ directing Respondents. DWR and .Hannigan to vacate their decision determining 5 On August 23, 2001, the CPUC approved both applications, but also concluded that the Debtor 5 DWR's November 5 revenue requirement to be just and reasonable, and directing them to comply 6 may have violated Section 851 as well as certain CPUC rules and decisions by failing to seek 6 with the Administrative Procedure Act and other applicable protections in any future decisions. The 7 approval of the transactions before granting access to the utility property. The CPUC, therefore, 7 accompanying Complaint further seeks ajudicial declaration thatDWR's determination that its 8 issued orders to show cause on the two applications.

8 revenue requirement is "just and reasonable."

9 The'orders to show cause required the Debtor to produce essentially all documents 9 For its services related to the above services, Applican spent 472.65 hours7.523148e-4 days <br />0.0181 hours <br />1.074735e-4 weeks <br />2.47325e-5 months <br />, incurring 10 relating to the CalPeak and Delta Matters within two weeks and appear at a hearing to show cause 10 fees in the sum of $160,434.50.

II why the Debtor should not be subject to sanctions for allegedly violating Section 851 and other 11 Section 851 Matter:

12 CPUC rules and decisions. The CPUC consolidated the two order to show cause proceedings and 12 Applicant also represents the Debtor in:proceedings that are currently pending 13 the Administrative Law Judge scheduled an evidentiary hearing for February 19, 2002 to 13 before the CPUC. The proceedings relate to the Debtor's compliance with California Public 14 determine whether any violation occurred and whether the Debtor should be subject to sanctions.

14 Utilities Code Section 851, which requires that any public utility obtain approval from the CPUC 15 During the Second Interim Period, Applicant has spent substantial time and effort to 15 before encumbering utility property that may be necessary to provide service to the public. CPUC 16 defend Debtor in the order to show cause proceedings. First, as required by the orders to show 16 General Order 69-C, however, permits a utility to grant a license, easement, or right ofway for 17 cause, Applicant reviewed and prepared for production tens of thousands of pages of documents, 17 "limited uses" without CPUC approval under Section 851 as long as the license or easement 4 18 most of which were single-page emails. Due to the nature of the documents requested by the 18 contains certain specified conditions, There was a longstanding practice among utilities to grant 19 CPUC, this document review required a painstakingly thorough and careful privilege review and 19 revocable licenses for utility property under General Order 69-C pending approval of a sale or 20 preparation of extensive privilege logs. When completed, the Debtor produced thousands of 20 lease under Section 851. Until late 2000, the CPUC had approved such transactions without 21 documents and filed privilege logs in excess of 450 pages.

21 comment or concern. In late 2000 and early 2001, the CPUC issued multiple decisions that raised 22 Second, Applicant prepared and filed motions to have the order to show cause 22 questions about the scope of the GO 69-C authorization. i  : ..

23 proceedings re-categorized from "rate-setting proceedings" to "adjudicative proceedings."' The 23 On June 25, 2001 and July 26, 2001, the Debtor filed two applications for approval 24 24 of transactions that resulted in an encumbrance of utility property. in the first application, the 25 Debtor sought approval of three leases of utility property to CalPeak Power, LLC (the "CalPeak 25 "Becauseof the short time period within which to produce the documents, a thorough substantive review of the review. As discussed below, a more thorough documents could not be completed at the same time as the privilege 26 substantive review of the documents occurred after the privilege review and production to the CPUC. In addition, 26 Matter"). CalPeak Power intended to build new electric generation facilities on the leased the short time period for the production required significant staffing on the project.

27 Under Section 1701. t of the Public Utilities Code, the CPUC must categorize each proceeding before it as either 27 property. In the second application, the Debtor sought approval to grant two easements to Delta "quasi-legislative," "rate-setting,"' or "adjudicative." The type of proceeding determines the rules and procedures 28 the CPUC must follow.

28 Energy, LLC (the "Delta Matter"). The easements were necessary to provide natural gas to a new 2"* INTERIMFEE APPLICATION C IOA IOO OICP 715254 vW/SF Co,1A.A&OOLL 715254 vI/SF 2- INTERIM FEE APPLICATION FBW601..DOC CASENo. 01EC30923 DM FBW601!.DOC CASENo. 01-30923 DM

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on the need to seek approval of several types of transactions.

1 CPUC granted the motions, thereby affording the Debtor additional procedural safeguards.

2 For its services relatedto the above services, Applicant spent 1037.95 hours0.0011 days <br />0.0264 hours <br />1.570767e-4 weeks <br />3.61475e-5 months <br />, incurring 2 Specifically, the re-categorization required,the CPUC to provide a detailed specification of.the "3 fees in the sum of $262,484.25.

3 charges brought against the Debtor and all supporting evidence in advance of the hearing. In 4 E. Business Operations 4 addition, the re-categorization ensured that the CPUC would bear the burden of proof in the order 5 Applicant performed various 'services and advised Debtor in connection with 5 to show cause proceedings.

6 matters relating to the California energy markets and the government's response to the energy 6 Third, Applicant prepared and filed Applications for Rehearing of the CPUC's 7 crisis. In response to the energy crisis, the California Legislature has restructured California's 7 decisions on the Debtor's applications. Applicant was required to file the Applications for 8 electric industry in numerous'ways, including: the enactment of AB Xl, which (as discussed 8 Rehearing in order to preserve the right to seek a writ of review of the CPUC's decisions in the 9 above) authorized the DWR to temporarily purchase power on the wholesale market and resell that 9 California Court of Appeal. Cal. Pub. Util. Code § 1731(b). The Applications for Rehearing 10 power directly to Debtor's customers and divested the CPUC of its traditional authority to 10 required a review of all CPUC decisions interpreting or discussing General Order 69-C and II determine whether procurement costs are "just and reasonable"; and the enactment of AB 6X, II Section 851.

12 which barred public utilities, including Debtor, from disposing of electric generation facilities prior 12 Fourth, Applicant initiated and is continuing a thorough factual investigation of the 13 to January 1, 2006 and piovided'that such generation assets "remain dedicated to service for the 13 alleged violations., The factual investigation has included a thorough review of tens ofthousands 14 benefit of California ratepayers." The CPUC also continues to play an integral role in California's 14 of documents, witness interviews, and visits to inspect the relevant properties. In addition to the 15 restructured electricity markets. -The manner in which this restructured market is implemented will 15 factual investigation, Applicant has also completed a significant amount of legal research to 16 have an enormous financial effect on Debtor:

16 develop various legal arguments in defense of the Debtor.

17 Applicant performed services and advised the Debtor in connection with developing The services performed by Applicant on the 851 Matters during the Second Interim 18 a strategic plan and analyzing .Debtor's legal options with. respect to the DWR revenue

18 Period have been necessary to defend the Debtor against the CPUC's efforts to collect significant 19 requirement, a related rate'agreement between DWR and CPUC, the recent Legislative enactments 19 penalties. Although the CPUC has not yet articulated its position on sanctions in this case, in the 20 and other facets of the restructured electricity market, To date, Debtor has not, except for the 20 past the CPUC has relied on Public Utilities Code Section 2107 as a basis to sanction public 21 litigation described above, commenced any litigation in connection with these potential claims.

21 utilities. See. e.g., Applicationfor Authority Under Section 851 for Koch Pipeline Company, L.P.

22 Applicant also performed services and advised Debtor in connection with structuring 22 to Sell Crude Oil Pipelinesand Related Assets to EEOT Energy Pipeline, 1999 Cal. P.U.C. LEXIS 23 the relationship between the various components of Debtor that would be disaggregated and spun off 23 498, *16-17 (Aug. 5, 1999).

24 as part of Debtor's Plan of Reorganization. Specifically, Applicant provided preliminary advice to 24 In addition to the defense of the Debtor in the order to show cause proceedings, 25 Debtor's personnel responsible for managing Debtor's power distribution assets on the process by 25 Applicant has also advised the Debtor on numerous Section 851 compliance matters. As a result 26 which these assets could emerge as a stand alone company from a corporate contracts, corporate 26 of the recent CPUC decisions, which altered the permissible use of licenses and rights of way 27 governance and corporate securities perspective.

27 under General Order 69-C, the Debtor reviewed its procedures andapproach to Section 851 28 For its services related to the above services, Applicant spent 919.40 hours4.62963e-4 days <br />0.0111 hours <br />6.613757e-5 weeks <br />1.522e-5 months <br />, incurring 28 compliance. Applicant has provided advice on the interpretation of the recent CPUC decisions and C6OLEY OOW*,O LL1 705254 'I/SF 2" INTERIM FEE APPLICATION 715254vlWSF 2 INTERIM FEE APPLICATION l* ^A),L^ FHW601.DOC CASENo. 01-30923 DM

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F. Callison, Neal J. Stephens, James C. Maroulis, Lori E. Ploeger, Gregg S. Klciner, Jeffrey S.

1 fees in the sum of $296,894.00.

2 Karr, Patrick C. Pope, Cory E. Manning, Clay C. Wheeler, Maureen P. Alger, Wendy J. Brenner, 2 F. Plan and Disclosure Statement Applicant has spent a de minimus amount of time monitoring the status of a Plan and 3 Karen S. Daly, Michele E. Moreland, Steven G. Sklaver, Susan L. Ruebush, Greg K. Klingspom, 3

4 Alma L. (Liza) Prado, Peter T. Smith, Erie J. Steiner, Craig C. Daniel, John P. Kinsey, Angela L.

4 Disclosure Statement.

5 Mikels, B. Douglas Robbins, Susan E. Gonzalez, Joyce E. Stackpole, Daniel R. Kaleba, Kate J.

5 For its services related to the above services, Applicant spent 0.10 hours1.157407e-4 days <br />0.00278 hours <br />1.653439e-5 weeks <br />3.805e-6 months <br />, incurring 6 Rotter, David D. Tull, Kris T. Cachia, Margaret Baer, Cornelius R. Bonner, Marjorie P. Wilbur, 6 fees in the sum of $35.00 during the Second Interim Period.

7 Danielle A. Fluker, Kelly M. Tanisawa, Teresa M. Dippery, Sherlyn M. Takacs, Claire M.

7 G. Travel 8 Cochran, Gloria Torres, and Michael D. France.

8 Various of Applicant's professionals were required to travel in connection with 9 2. Pursuant to Section (b)(3) of the United States Trustee's Guidelinesfor Reviewing 9 providing services to the Debtor. This travel was primarily for the purpose of attending critical 10 Applicationsfor Compensation and Reimbursement of Expenses Filed Under 11 U.S. C. § 330, a 10 meetings with the Debtor's representatives, experts, committees, and co-counsel.

11 summary sheet of attorneys and paraprofessionals who have worked on this case, their status, I1 For its services related to the above services, Applicant spent 30.00 hours0 days <br />0 hours <br />0 weeks <br />0 months <br />, incurring 12 billing rate per hour, the total hours each devoted to the case and the total fees requested for each 12 fees in the sum of$10,729.006 during the Second Interim Period.

13 professional, and summaries of the attorneys and paraprofessionals' qualifications are attached 13 111. FUTURE SERVICES 14 hereto as Exhibit B to the Schenker Declaration.

14 Applicant anticipates continuing to assist the Debtor in its dealings with the DWR, CPUC and 15 V. CONCLUSION AND PRAYER 15 other administrative and regulatory bodies. Applicant will continue to represent the Debtor in 16 I. In performing the services described above during the Second Interim Period, 16 litigation and administrative matters concerning the BFM Contracts, the DWR litigation, the 851 17 Applicant spent 3149.00 hours0 days <br />0 hours <br />0 weeks <br />0 months <br />. Applicant believes that the sum of $928,769.257 is reasonable 17 matters and other litigation and/or administrative matters that are necessary and appropriate.

18 compensation for its services, calculated on the basis of the hours and hourly rates listed in the 18 IV. ESTABLISHMENT OF FEES 19 attached summary and the time summaries attached to the Declaration.

19 "A compensation award based on a reasonable hourly rate multiplied by the number of hours 20 2. In performing its services during the same time period, Applicant incurred actual 20 actually and reasonably expended is presumptively a reasonable fee." In Re Manoa Finance 21 and necessary expenses of $52,714.208. An itemized summary of these expenses is set forth on 21 Compan , 853 F.2d. 687 (9th Cir. 1988). Establishing a reasonable hourly rate requires 22 Exhibit C to the Time Records Exhibit.

22 consideration of market rates in the relevant community which are, in turn, at least partly a function of 23 3. Kris Tsao Cachia is a paralegal who assisted Applicant in the preparation of this fee 23 the type of services rendered and the lawyer's experience, skill and reputation.

24 Application. Ms. Cachia bills at the rate of $130 per hour. Applicant submits that these efforts are 24 I. The members, associates, and paraprofessionals of Applicant who have rendered 25 professional services in this case are as follows: Stephen C. Neal, Samuel M. Livermore, J. 25 26 The total amount of fees is$934,133.75. However, in compliance with the U.S. Trustee's Guidelines regarding 26 Michael Kelly, Deborah A. Marshall, Martin S. Schenker, John C. Dwyer, Jamie E. Chung, Linda Travel, Applicant has deducted $5,364.50 (one-half of the Travel fee amount) from the total amount of fees and is 27 requesting fees of $928,769.25.

27 6 The total amount of fees is $934,133.75. However, in compliance with the U.S. Trustee's Guidelines regarding The total amount of expenses is S54,930.54. However, in compliance with U.S. Trustee's Guidelines regarding 28 Word Processing, Applicant is deducting $2,216.34 from the total amount of expenses and is requesting expenses of 28 Travel, Applicant has deducted $5,364.50 (one-half of the Travel fee amount) from the total amount of fees and is S52,'714.20.

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I properly compensable under In Re Nucorp Energy. Inc. 764 F.2d. 655 (9th Cir. 1985).

2 Approximate fees incurred in preparing this fee application are'as follows: Gregg S. Kleiner 3 $2,130.00; and Kris Tsao Cachia - $2,340.00.

4 4. Applicant's Second Fee Application, the Schenker Declaration, and Time Records 5 Exhibit were filed with the Court and served on or'about January 14, 2002. Concurrently, 6 Applicant served the Second Fee Application on the parties listed on the Special Notice List.

7 Pursuant to paragraph 8 of the Interim Fee Order, the time records can be accessed by the public at 8 BMDS, 246 First Street, Suite 202, San Francisco, California 94105. In the event a party desires a 9 copy of the time records, that party should contact BMDS at the above address or telephonically at 10 (415) 371-0232 or by facsimile at (415) 371-1973.

II WHEREFORE, Cooley Godward LLP, prays for interim compensation in the sum of 12 $928,769.259 and expense reimbursement in the sum of $52,7124.2010 for the Second Interim Period.

13 Dated: Januaryý'14, 2002 14 COOLEY GODWWARD LLP 15 "

"16 By:

17 . .J. Michael Kell Special Cou sel for Debtgr-"

18 PACIFIC GAS and ELECTRIC COMPANY 19 20 21 22 23 24 25 9 The total amount of fees is $934,133.75. However, in compliance with the U.S. Trustee's Guidelines-regarding 26 Travel, Applicant has deducted $5,364.50 (one-half of the Travel fee amount) front the total amount of fees and is requesting fees of$928,769.25.

27 " The total amount ofexpenses is $54,930.54. However, in compliance with t,.S. Trustee's Guidelines regarding Word Processing, Applicant is deducting $2,216.34 from the total amount of expenses and is requesting expenses of 28 $52,714.20.

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