ML021610313

Declaration of Michael Schonherr in Support of Motion for Authorization to Incur Additional Permit Expenses

ML021610313
Person / Time
Site:	Diablo Canyon
Issue date:	05/23/2002
From:	Schonherr M Howard, Rice, Nemerovski, Canady, Falk & Rabkin, 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: ML021610313 (5)

Text

• 6 I

1 JAMES L. LOPES (No. 63678)

JANET A. NEXON (No. 104747) 2 JULIE B. LANDAU (No. 162038)

HOWARD, RICE, NEMEROVSKI, CANADY, 3 FALK & RABKIN A Professional Corporation 4 Three Embarcadero Center, 7th Floor San Francisco, California 94111-4065 5 Telephone: 415/434-1600 Facsimile: 415/217-5910 6

Attorneys for Debtor and Debtor in Possession 7 PACIFIC GAS AND ELECTRIC COMPANY 8

9 UNITED STATES BANKRUPTCY COURT 10 NORTHERN DISTRICT OF CALIFORNIA l1 SAN FRANCISCO DIVISION 12 In re Case No. 01-30923 DM PACIFIC GAS AND ELECTRIC Chapter 11 Case HCWARD 13 RICT, COMPANY, a California corporation, June 13, 2002 14 Date:

Debtor. Time: 1:30 p.m.

Place: 235 Pine Street, 22nd Floor 15 San Francisco, California Federal I.D. No. 94-0742640 16 17 DECLARATION OF MICHAEL SCHONHERR 18 IN SUPPORT OF MOTION FOR AUTHORIZATION TO INCUR ADDITIONAL PERMIT EXPENSES 19 20 21 22 23 24 25 26 27 A 41 :

"1 I:'

28 DECLARATION OF MICHAEL SCHONHERR

I, Michael Schonherr, declare:

1. I am a Manager in the Building and Land Services Department for Pacific 3 Gas and Electric Company ("PG&E"), a position I have held since September 2001. I have 4 worked in various managerial capacities for the Building and Land Services Department for 5 over 14 years. I make this declaration in support of the Motion for Authorization to Incur 6 Additional Permit Expenses (the "Motion"). Defined terms used herein shall have the 7 meanings set forth in the Motion. This Declaration is based on my personal knowledge, 8 except where indicated otherwise. If called as a witness, I could and would testify 9 competently to the facts stated herein.

10 2. I am informed and believe that PG&E holds tens of thousands of operating 11 and land occupancy permits, licenses and related governmental entitlements from local, state 12 and federal government agencies. I am informed and believe that approximately 15,000 of H(M,,) 13 these permits, licenses and entitlements (collectively, "Permits") must be transferred or RICE cka* 14 reissued to the New Entities in order for the New Entities to conduct business operations in lAIA

&RABKN 15 accordance with applicable laws, rules and regulations. The New Entities could begin 16 operations without a small portion of these Permits, which involve non-essential activities.

17 3. The Plan contemplates that PG&E will follow established application 18 procedures for the transfer of Permits under applicable local, state or federal law. I am 19 informed and believe that many Permit transfers will involve ministerial review by the 20 government agency, which typically takes several weeks to process following receipt of 21 appropriate documentation, while other Permit transfers will involve discretionary review 22 and approval by the government agency, which varies by agency but typically requires from 23 one to six months to process following receipt of appropriate documentation.

24 4. Some government agencies will be receiving an influx of Permit 25 applications, which may stretch agency resources. Thus, in assessing the potential time 26 periods required for completion of the Permit transfers, PG&E is assuming that typical time 27 periods for processing applications may be extended, particularly for agencies receiving 28 multiple applications.

DECLARATION OF MICHAEL SCHONHERR

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1 5. The Motion seeks approval for certain expenses related to the transfer of the 2 Permits to the New Entities (the "Permit Work"). The Motion supplements PG&E's 3 previous Permit and Franchise Motion, which focused on expenses related to the transfer of 4 Permits issued by local government agencies (as well as expenses related to obtaining new 5 franchises). The focus of the Motion is on expenses related to the transfer of Permits issued 6 by state andfederal government agencies, which comprise the majority of the Permits to be 7 transferred to the New Entities (there are in excess of 6,100 federal agency Permits and in 8 excess of 6,700 state agency Permits). The contractors described below have specialized 9 expertise and experience in dealing with government entitlement issues and will handle, in 10 addition to the state and federal government Permit transfers, the more complex local 11 government Permit transfers as well.

12 6. The contractors described below (the "Contractors") will assist PG&E with 13 the process of transferring Permits to the New Entities. Although PG&E maintains internal 1AVARID expertise in this area, the volume and timing of the Permit Work requires substantial outside RICE CANNI 14 MAIR

& R\IKIN will perform the Permit Work at the direction of and under the 15 assistance. The Contractors have previously worked for PG&E, are familiar with 16 supervision of PG&E. The Contractors possess significant experience and understanding of the 17 PG&E's unique permit issues and Contractors who will perform this work are as 18 local, state and federal processes. The 19 follows:

20 *CH2M-Hill, Inc.

• EDAW, Inc.

21 *Essex Environmental eMatrix Environmental Planning 22 *Dinwiddie & Associates 23 7. Specifically, the work to be performed by each of the Contractors will and 24 include: (i) contact with agency staff to conduct "pre-application" meetings to discuss contacts and 25 confirm transfer requirements such as form and content of applications, key assembly of 26 supporting documentation required for the transfer process; (ii) analysis and applications for the 27 necessary supporting documentation; (iii) preparation and submission of relating to the 28 transfer of Permits; (iv) coordination and resolution of agency inquiries DECLARATION OF MICHAEL SCHONHERR 1 transfer process; and (v) negotiations with agencies as necessary.

2 8. Each of the Contractors will perform the functions described above.

3 However, the work will be divided among the Contractors according to their availability and 4 also according to government agency focus. For example, one Contractor may handle the 5 transfer of Permits issued by certain federal agencies such as the United States Forest 6 Service (covering over 2,000 Permits), while another Contractor may handle the transfer of 7 Permits issued by the California Department of Motor Vehicles (covering over 1,200 8 Permits).

9 9. In addition to the Contractors, PG&E anticipates hiring independent 10 contractors to perform similar functions. These individuals will be hired on a temporary 11 basis through Corestaff Services, Inc. ("Corestaff'), and will also have familiarity with 12 PG&E's unique permit issues and experience with government agency application HOWARID 13 processes. The number of additional staff required will depend on the ability of the NtMIROMSKI oýNvy tIALI(

14 Contractors to fully staff projects as well as the scope and complexities of the Permit Work 15 as the process advances. For example, one individual (a retired PG&E employee) has been 16 chosen to lead the process of transferring Permits issued by the California Department of 17 Transportation. PG&E contemplates that additional individuals will be similarly employed 18 on an as-needed basis.

19 10. PG&E estimates that the total expenses to be paid to the Contractors 20 (including any individuals employed by Corestaff) will be approximately $7 million, over 21 the period beginning May 2002 and continuing to the Effective Date (as defined in the Plan) 22 or such earlier date on which the Permit Work has been completed. PG&E will pay the 23 Contractors on a monthly basis as work is completed, based on monthly billings by the 24 Contractors (except for individuals employed by Corestaff, who will be paid on a weekly 25 basis, based on the number of hours worked).

26 11. The Permit Work is essential to the implementation of the Plan. PG&E 27 believes that it could take several months to complete the Permit Work necessary to enable 28 the New Entities to operate their respective businesses. The timing for Permit transfers will DECLARATION OF MICHAEL SCHONHERR 1 vary, in part, due to factors over which PG&E has no control, such as the exercise of an 2 agency's discretion in processing Permit applications, or the ability of certain agencies to 3 process a substantial number of applications at the same time. Therefore, the Permit Work 4 must begin well in advance of confirmation of the Plan, given the volume of work involved 5 and the potential time period required for completion of this work.

6 12. To the extent that subsequent events demonstrate that the Permit Work will 7 not be necessary, the work can be terminated immediately. PG&E's standard contractual 8 provisions in place with the Contractors and Corestaff do not guarantee future work or any 9 minimum amount of revenue. PG&E also maintains the right to terminate the contracts at 10 any time without cause, in which case PG&E is liable only for work performed to the date of 11 termination plus costs reasonably incurred by the Contractors in terminating any work in 12 progress.

HCWARD 13 I declare under penalty of perjury under the laws of the United States of America RDE cA*q 14 1gEg that the foregoing is true and a correct c and n that this h Declaration a issiy executed this 23rd day of

&,RA.BKIN A 15 May, 2002, at San Francisco, California.

16 17 MCA CHONHERR WD 052302/1-1419905/996602/v 1 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF MICHAEL SCHONHERR