ML021330419
| ML021330419 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 04/29/2002 |
| From: | Vicky Lewis 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: ML021330419 (6) | |
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5i KŽ Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 12 HOWARD 13 RICE "ECAM-14
&RAINK 15 16 17 In re PACIFIC GAS AND ELECTRIC COMPANY, a Califomia corporation, Debtor.
Federal I.D. No. 94-0742640 Case No. 01-30923 DM Chapter 11 Case Date:
May 20, 2002 Time:
1:30 p.m.
Place:
235 Pine Street, 22nd Floor San Francisco, California DECLARATION OF VALERIE LEWIS IN SUPPORT OF MOTION FOR AUTHORIZATION TO INCUR AND PAY BENEFIT PROGRAM EXPENSES DECLARATION OF VALERIE LEWIS JAMES L. LOPES (No. 63678)
JANET A. NEXON (No. 104747)
JULIE B. LANDAU (No. 162038)
INNA M. KATSEN (No. 214244)
HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Professional Corporation Three Embarcadero Center, 7th Floor San Francisco, California 94111-4065 Telephone:
415/434-1600 Facsimile:
415/217-5910 18 19 20 21 22 23 24 25 26 27 28
1 1, Valerie Lewis, declare:
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I am a Benefits Manager for Pacific Gas and Electric Company ("PG&E"),
3 the debtor and debtor-in-possession in this Chapter 11 case. I am responsible for overseeing 4
the development of new benefit programs in connection with the implementation of PG&E's 5
proposed plan of reorganization (as amended from time to time, the "Plan"). This 6
declaration is submitted in support of PG&E's Motion for Authorization to Incur and Pay 7
Benefit Program Expenses (the "Motion"). Defined terms used herein shall have the 8
meanings set forth in the Motion. I make this declaration from personal knowledge and if 9
called as a witness, could and would testify competently to the matters set forth herein.
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PG&E offers a wide array of health, welfare and retirement benefit 11 programs to employees and their dependents and domestic partners. These programs include 12 the following types of health benefits: medical, dental, vision, prescription drug, mental 13 health, alcohol and drug care, health care reimbursement accounts and dependent care OWRD NE'NI 14 reimbursement accounts. In addition, PG&E offers the following-benefits to its employees:
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&RAMON 15 (i) time-off programs, including vacation, holiday and leave of absence; (ii) sick leave and 16 disability programs; (iii) life insurance; and (iv) retirement benefits, including pension plans S 17 and retirement plans.
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In addition to complying with applicable employment laws and also 19 providing competitive benefits in order to attract and retain employees, PG&E is under 20 contractual obligations to provide certain types and levels of benefits to thousands of 21 employees under the collective bargaining agreement (the "Collective Bargaining 22 Agreement") between PG&E and the International Brotherhood of-Electrical Workers, Local 23 1245 (the "IBEW").
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In order for the New Entities to hire the thousands of employees that will be 25 needed, new benefit prograrfis must first be developed. The Plan provides that the benefit 26 programs to be offered by the New Entities will be comparable to the benefit programs 27 currently in place for PG&E's employees. In addition, for the approximately 2,000 28 employees who are covered by the Collective Bargaining Agreement and are expected to DECLARATION OF VALERIE LEWIS 1
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10 11 12 HOWARD 13 RKE "NECAW 14 A~O*,C 15 16 17 18 19 20 21 22 23 24 25 26 27 28 transfer to one of the New Entities, PG&E is obligated to negotiate with the IBEW regarding the benefits to be provided to these' employees or to provide the same benefits as are currently required under the Collective Bargaining Agreement. This is due to a successor provision in the Collective Bargaining Agreement requiring that the New Entities assume the existing agreement and recognize the IBEW as the employee's exclusive bargaining representative.
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Development of comparable benefit programs for the New Entities will require benefit program providers to customize their benefit programs to meet PG&E's needs and requirements. Due to the different number-of employees at each New Entity (compared to PG&E's existing workforce) and other factors, PG&E anticipates that the process of developing comparable benefit programs for the New Entities will be complex and time-consuming. At a minimum, the process will involve an assessment of current benefit levels, comparison ofcurrent benefits with those available in the marketplace for the New Entities, and extensive negotiations with both the IBEW and benefit program providers.
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The consultants described below (the "Consultants") will assist PG&E with the process'of developing new benefit programs for the New Entities as well as any related benefit program work for the Reorganized Debtor (collectively, the "Benefit Program Work"). PG&E intends to maintain its existing benefit programs without any substantial changes. However, it is anticipated that existing benefit programs may require certain modifications due to the anticipated reduction in PG&E's workforce that will result from transferring employees to the New:Entities. The Consultants will work under the direction and supervision of a PG&E Benefits Manager. While PG&E has in-house expertise in this area, PG&E requires substantial outside assistance as a result of the volume of work to be completed and time period for completion of the work.
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Smith-Jennings, Inc. Smith-Jennings is a benefits consulting firm and will assist PG&E in (i). assessing the comparability of existing benefit programs with potential new benefit programs, (ii) establishing the benefit program provider selection criteria, and (iii) assisting with negotiations with the IBEW under the Collective Bargaining Agreement DECLARATION OF VALERIE LEWIS 1
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15 16 17 18 19 20 21 22 23 24 25 26 27 28 and negotiations with benefit program providers.
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The total estimated expenditure for Smith-Jennings' work described above is approximately $650,000, for the period beginning January 2002 and continuing to the Effective Date (as defined in the Plan), or such earlier date on which the Benefit Program Work has been completed. Smith-Jennings began limited work in January 2002 for the purpose of assisting PG&E in determining the scope and timing of the Benefit Program Work to be completed. PG&E will pay Smith-Jennings on a monthly basis, based on monthly billings by Smith-Jennings.
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Towers Perrin. Towers Perrin is a benefits consulting and actuarial firm.
Towers Perrin has provided benefit consulting and actuarial. services to PG&E for approximately 20 years and retains PG&E's health claims history and actuarial information.
This information will be required for program providers to determine program pricing and options for the New Entities. Towers Perrin-will also perform actuarial work that will be necessary in order to separate the various pension and retirement trusts currently in place at PG&E. Finally, Towers Perrin will advise PG&E with respect to the design of all new benefit programs.
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The total estimated expenditure for Towers Perrin's work described above is approximately $550,000 for the period beginning January 2002 and continuing to the Effective Date (as defined in the Plan), or such earlier date on which the Benefit Program Work has been completed. Towers Perrin began limited work in January 2002 for the purpose of assisting PG&E in determining the scope and timing of the Benefit Program Work to be completed. PG&E will pay Towers Perrin on a monthly basis, based on monthly billings by Towers Perrin.
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William M. Mercer, Incorporated ("Mercer"). Mercer is a benefits consulting firm and will assist PG&E in all phases of the development of short term and long term disability benefit programs for the New Entities, including analysis of PG&E's existing disability benefits, new program design, identification of disability benefit program providers, assisting with the bidding process and negotiations with providers.
DECLARATION OF VALERIE LEWIS 1
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The total estimated expenditure for Mercer's work described above is
.2 approximately $170,000 for the period beginning May 2002 and continuing to the Effective 3
Date (as defined in the Plan), or such earlier date on which the Benefit Program Work has 4
been completed. PG&E will pay Mercer on a monthly basis, based on monthly billings by 5
Mercer.
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A substantial amount of the Benefit Program Work must begin immediately 7
in order for Plan implementation to occur on a timely basis. As with any business entity 8
employing thousands of employees, the development of comprehensive benefit programs is 9
a critical first step in establishing the foundation for the New Entities to begin business 10 operations. Until such benefit programs are developed, critical implementation tasks leading 11 to the transfer of existing employees and the recruitment of new employees cannot proceed.
12 The anticipated complexities and time period required for completion of negotiations related 13 to development of large-scale benefit programs for the New Entities, along with the HOWARDCV M
14 negotiation requirements of the Collective Bargaining Agreement with the IBEW, require FALU<
15 that the Benefit Program Work begin well in advance of Plan confirmation in order to assure 16 timely implementation of the Plan.
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- 14. PG&E retains the right to terminate the Consultants' contracts at any time.
18 PG&E's standard contractual provisions in place with the Consultants do not guarantee 19 future work or any minimum amount of revenue. PG&E also maintains the right to 20 terminate the contracts at any time without cause, in which case PG&E is liable only for 21 work performed to the date of termination plus costs reasonably incurred by the Consultants 22 in terminating any work in progress.
23 24 25 26 27 28 DECLARATION OF VALERIE LEWIS I declare under penalty of perjury of the laws of the United States that the foregoing is true and correct, and that this declaration was executed at San Francisco, California on April 2f*, 2002.
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10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF VALERIE LEWIS HOMRD CAMIX EUK
&RAMNU WD 04290211-1419905/991072/vI I