ML022610331

Declaration of Lance Maeda in Support of Motion for Authority to Incur Additional Miscellaneous Implementation Expenses

ML022610331
Person / Time
Site:	Diablo Canyon
Issue date:	09/11/2002
From:	Maeda L 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: ML022610331 (8)

Text

JAMES L. LOPES (No. 63678)

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

HOWARD, RICE, NEMEROVSKI, CANADY,

_,FALK

'ý, & RABKIN A Professional Corporation 4 Three' Embarcadero Center,`7th Floor San Francisco, California 94111-4065 * - `3"-3

-5 Telephone: '"+415/434-1600 Facsimile: 415/217-5910.

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

UNITED STATES BANKRUPTCY COURT 9

NORTHERN DISTRICT OF CALIFORNIA

-10 SAN FRANCISCO DIVISION 11 I I-n ri-

-- Case No. 01-30923 DM' 12 Chapter 11 Case

-PACIFIC GAS AND ELECTRIC

-$WAR" 13 COMPANY, a California corporation, Date: October 2, 2002 NEM90C'SU Time:- 9:30 a.m.

cAN 14 Debtor. Place: 235 Pine Street, 22nd Floor San Francisco, California,

" "15 T7,-1, r,.1 I T) No 0742640

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17 18 "-DECLARATION OF LANCE MAEDA IN SUPPORT OF MOTION FOR AUTHORITY TO INCUR-ADDITIONAL 19 MISCELLANEOUS IMPLEMENTATION EXPENSES - j +

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28 DECLARATION OF LANCE MAEDA P6,K11

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1 I, L-a-c Maeda, de6laie*:

1. 'f am employed by Pacific Gas and Electric company ("PG&E")- the debtor "anddebtor-ifn-possession i;nthis'Chaliter 11 cs6. I haVe been employed by PG&E since 4 "1996and hold the position-ofDiriecior of Applicati6n Developi'nent & Support,. In this positon,; I amrep'orsible for fe*Iiical oversight of informatio'n technology ("IT")sof are 5 ýrdsetg'i thi'P&E 's I r e1oficatiolSyser~lh ardTehifo fs l ' "

6 .r6ject§W.ithinCPG&B§ Iifoi.ii6tioi Sysiefis anid Techri"dal Services department; I also 7 hdve conompany-wide resp rsibilit'i*in'th&IT area,-inludirg responsibility for creatifig and 8 implementing plans, policies and procedures for PG&E's IT software activities and for supervisifngemployees efgg~ged m systems development and sbpport functions. In 10 connedtionwith implementation of PG&E's'prop6sed'Plan of Reorganizatiorr (as amended from time to time, t"'Pli~n"); my s'pecific resi"bnsibiliti&'inýlude. identificatiofi of 12 appli~cations thtitwll be needed by th6 N Efitifiifintegr-atedgtesting of applihations.

tr migrating from PG&E to flie&'Ne*.Entities, and defining gecurity strategie-for apphicMions RJCE NEMEPOV9U(

F,.jx 14 totoýbeused .Y.thee Ne"ew"Ehtifies...

n tes-'"r-,v 1 . .. , .

"--15 9This d6cl1aratin 'i~s'submifted in sigport of RG&E's Motion-for Authority

, ," , *.' . S 16 'i6 Ii~ur Additioal Mi'seellane'dus Im'plei ieniatibn Expenses (the "Motion"). .Defined. terms 17 used herein shall ha'Ve the meanings'set forih thie`fMotion.- I make this declaration based 18 on pefsonal kfiowledge, e) ept where otherw~ise indi'ated, and if called as a witness, could 19 arid wýrouird'testify c6l'efiteritlfý16'ttie matters'set forth herein. ,'

r3. 'Sdftware ticieses-and Related Services! 'Currently, 20 PG&E Corporation 21 provideg certain'sei'Vices t6 PG&E utiliiifigs'oftware prodflicts that are-licensed by PG&E 22 Corporation. As a result of t'he separati6n uýde the Plan", PG&E must purchase and install 23 "severalsoftware products so"tha it'wili b6 able' to perform these .functions internally.. The 24 total costs for these software'licenses and related training and siipport services is 25 approximately $9,200. The types of software licenses that'PG&E will need to purchase 26 include: (i) software used to track employee contributions td PG&E'spolitical action.

conmmittee; (ii) software-u~ed to-manage PG'&E's.pension benefits funds; (iii) rnd'ension 27

° ff 28 "softwareused to train PG&E'employees over the Internet on business'ethics and compliance V.(* DECLARATION OF LANCE MAEDA

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4 1 with legal and regulatory requirements; (iv) software used ,to track risk management and

'2 ifisurance requirements;',ad (v) softwareused for taxi:,eturn preparation and tax solutions.

3'1 -The for'eging software licenses must be purchased promptlyto.allowyu for time to install and

"-4 bonfigure the software, as part of a particular business system, or set -ofbusiness..

,prcesses, to databases 5 test the installation,'. and,' in some 'cases, to convert existing data or create separate

, ,G&E

.of PG&E from the Ne,.ontities.w s, requires

-'6 "to accourit for the.separation the 7 .additional time to provide instruction and training to,the employees who will be using various software products. , ... . .....

,9, -4. StockOption Plan. :PG&E Corporation currently administers a stock stock.

10 option plan for PG&E.employees who hold options :to~purchase PG&E Corporation

_tock will 11' Pursuant to the Plan, employees who hld potions to purchase, PG&E Corporation 12' t'also-be granted Options to purchase PG&E stockl which will be publicly traded after the Homm,

• 13 -Plhir Effective Date..-Therefore, :PG&E will-require a, new PG&E stock option plan, which it XCE haI selected will administer for all individuals who are granted PG& -.stock options. PG&E NEM9Pvs.rJ FAY. 14

&KABK.(N

• Salombn'Smith Barney, a. rnember pf Citigroup Q.tSalomon'), to develop a system for .. '..

with a range of 16 administering the new stock option plan. Salomon provides corporations

,including stock option plan seryices. Theprocess of 171 "corpbrate financial services,

'18 developing and'implementing the new stock ,option plan is expected to take approximately the S19 three months.' Specifically, Salomon,will:, (J),,design and develop. a system to administer (iii) 20 'stock option plan, including the online.access features, (ii) install andtest the system,

,option "21 "set 'ipaccountsfor option-holders,,and (iv) develop ,a communication. plan to inform by the Plan 22 ,holders on how to use the.newsystem.. All of these tasks must becompleted after 23' Effective Date, since option'holde;s may wish to exercise their options imrnmediately a cost of 24 'the Plan Effective Date., Salomon will.provide these services to PG&E for which PG&E will 25 apprdximately $25,000. .!This cost includes'an initial set-up fee. of,$5,000,

,*26 '..- .

-'berequired to pay even if the.project is cancelled before completion*.:-:-

nun ib 27 5...., Human Resources Software for the New Entities.; PG&E has identified a tluman 28 to obtain the software, as well as to install, configure and.test it so that all critical DECLARATION OF LANCE MAEDA

".1 resources fiinctions, will ebiifpJace-for the New Entities by the Plan Effective Date. PG&E 2 will obtain the ificessary software licenses but the licenses will be transferable to tlhe.New 3 Entities-uponthe elan Effectie Date. If the Plan is not'confirmed, PG&E anticipates that it

.4, -will be able to.use-all pf.the software tools described below, which.represent current (and

-therefore upgradedyversions of software already.in use by-PG&E. The software identified 6 below relates: to additionglhu.man.:resource requirements, that have not been covered in the 7, previous motions co'iering human resource exp.qnses.

• 8 a.-,- Random Drug Testing: :"Heidi/Assistant!',is asoflware tool currently used 9 "byPG&Eto manag6.r4ndom'0rug testing of certain classes of employees in order to comply 10 with Departnfent of-Transportatij.pnregulations.. The' New Entities will also be subject to the 11; "Departnment of-Transporitatjon, rg:ulatioris requiring certain classes ofemployees to be.

12 randomly drug-tested. Therefore' PG&E intends topurchase a similar.sof.warelicense for HoWAD 13 the New Entities, froimC6mpliace- Information Syst'ems for approximately $6,590,' which RiCE Ar3K.IN F

&IKABKJN includes the, software andlsupport. for 2,500, tests peryear:. *

ý'T.15 - -. b. :,, Affirmativý Action, Plan: "'Greai AAP" is a.software tool currently used by

.16 PG&E to cr~ate:*ifid! mrnage-affirmative action plans -to:comply wjth, state-and, federal, IT& regulations. -The New Entities"will also require this-tool tomanage their affirmative action

18. plans., PG&E intefids to. purchas& this"software license fromr Berkshire. Associates, Inc. for

' 19. approximately $2,,995., .w'hich: inclu'des thdeGreatAAP Master, Edition Single License, and one 20 yeat of technidal support2. -,

21: -c:.' TiainihnManagement: "Training, S.ei-ver" is a-software tool currently used 22 by PG&E to manage trainiiig classes, training classenrollment and employee training

. 23 records. It is currently the sole repository for PG&E-employeetraining records. These 24 "trainingcertifications aie nec ssary to ensure that employees can continue to safely perform "25'

'their jobs and o05eiaie certain specialized equipment. Therefore; the New Entities will 26 require this software tool to. track employee ,taining records as well, including the records 27.1 for cuirrent. PG&E empl6yees who may work for the New Entities. PG&E intends to>

28 purchase this software license from THINQ Learning Solutions Inc..for approximately

'DECLARATION OF LANCE MAEDA Inhdt

-$202000.~ ~ o-,Wl ~ rvd ntlain;cofgrto adtsigfrti 1

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$20,000.ifgn~dditeioh i 'e, THhNQ willprovydes -instlain-spconfigur6btatin aondetinge fto'rf this required Em'pl6n~ions Thestin&'A "Sca ETools"' I.il oaldrqithi-ofare tool torntyusdb 5`

-currenltusoeda by'PG&bbiecardscanfier (used toh66?ea'pre-erhlsoytwaento andeemploy-eetes) 7 required joheefuntion.Te§, w be~h ~eie Etiis'ill als hs-&faen requitehisofwae toolto.

9 10 .PG&E intends to piirchas e the Scati Tools softwA're lidense fTrom NCS -P6ýar~on-for

_,Vprokimately $1,725 iffd 'the -EEI Scatinfer softw~rcii~ense'frofriithe Edison-:Electric:

12 6.~~B nki' g oje~n t.ThrtheNew Entities; -Byth~e:Plan '

l-+VNARD 13 NEMERO9 C~mm 14 -Effective'Date, the New -Efitities w~ill require cerlinroft-ware'and IT applications to handle,'

KiABKIN

"-'~15' baiikih~g4n -ad m'oiiy-manageinbiit ervrices.-' The..sofiw-are ahd'a'pplications described h'ereiii

-involvepeiled dfniignd mbondy--managernint ~oftware' that *havenot bein 'coveted in "17' thie pie'-idiu motions approvinfg~oftware and 4T7 appliat~i npurchies.G& itdst pur6hase'licenges for d6rtfaiii specid.lized s'oftware products; v~hich~niust b&installed aiid I19" f&8tedTf&uis,& by 1te New Entities' (the'licenises'wil tra~nsferable to-'the New Entities -upon 20' the Plan Effective Date). In additior4 e~xistifig bah'kifig affd. mnoney management. data muist be

-21 ~s~ae'foi'GEand trdnsferk.ed.tc the ~picatiionsi~o ibe used by the New Entiti~s.

22 The ba~fiking'and-fniondy maifiagemeflt projects-'described below are e'pected t6xtak6 23 'appr~xini&6ly'thiee' to Tfoir monibs to'bomp lete',\hich iriclud~s the sbftware install~ation as

-24 'well i~s-the's~piirat1ifi'affd tra~nsfer'of data.' - -. - . ~

-25 "a. -- 'C sManip~eiiienfSoftwre and RI t~id'Services. PG&E currently

• 26' 'lice'diesRe~soif66,IQ s'oftware, which it uses to'Thanage'fts *daily'caish position and to record 27ý .bafikiiig ftaný,a&tions'to tht general ledger acoitn syte. 'Terfeorte w 28 Eniit~-PG& inteds ipurchase a s'irfiilar lic ense'from' Sung "'rdTireasurySytm

- DECLAKRATION OF LANCE MAEDA

- I 1: ("Sunguard"), a banking-software specialist, at a cost of approximately $110,950. Software 2 consultants from Sunguard:will. assist with the installation, configuration and.--,

" 3" "implementation: of ResourceIQ~at an additional cost of approximately $32,000.. .In addition, 4 PG&E will-,purchase. a license for Mellon Bank'sTelecash software for the NewjEritities at a 5 cost of approximately $350. This software is used to approye wirpe-transfers of money to and

,6 from Mellon Bank initiated through the Resource IQ sqftware systemn.

7. b., -. Bankihig Relationship-Software, and Related-Services. EG&E currently uses Banking.RelationshipLManager software.to analyze banking fees and~services. For the New 9 Entities, PG&E will purchase a, license ,forBanking Relationship-Manager software from 10 The Weiland Financial Group ("Weiland"), a, financia.1 services consulting. firm,. at a cqst of 1,1:! approximately,S20,500: -Weiland will alsb provideone or rnore:consultants who will assist 12 PG&E:in separating.the data-currently stored in-the-Banking Relationship Manager software HowARD, 13 ,used by PG&.:,.The, cost for the: consultants'- *ervices will. be approximately $2,000.

RJCE NEMEIQ5 Cw :-14 c. %,Project Management. -PG&E has.selected Bort and.Companyi Inc., a.cash management consulting.firm, to-provide project management servicesin conneption with the

, 16 -implementation of the banking ind inoney management processes for.the New Entities at a 17., -cost of approximately $30,000: -These services.will include scheduling, tracking anfd 18' "reportingon the status of the foregoing banking and money management projects.

,*19' 7. *, Electronic'Data Interchange. GE Global.Exchange Seirvices currently.

,20 "providesan Electronic Data Interchange ("EDI"') program for-PG&E's purchasing 6nd 21 accounts payable functiohs.. TheEDI Program allowsOPG&E to communicate electronically 22 with itS" vendors, and exihangý *purchaseorders, purchase order changes and invoices 23 electronically., It also permits PG&E to pay vendors via Electronic Funds Transfer.I PG&E 24 has found that the EDI program reduces its costs and improves the overall efficiencies of its 25 operations. Therefore;PG&E has decided to install the EDI program for the New Entities to 26 ensure a smooth transition upon separation and to avoid inefficient and potentially inaccurate 27 payment processing by the New Entities. :,PG&E has selected GE Global Exchange Services 28 to provide a similar EDI: program for the New Entities. This will include analysis of current DECLARATION OF LANCE MAEDA 1 PG&E procedures, including special processes andreporing,'modifications toyarious 2 aspects of the existing EDI program to meet the special requirements of the New Entities,

- setting-iup'the Electroniic Furnds'Transfer.system; adding an.ilectronicconnection between 4 'GE dlobal Exchange Services~and the New Entitibs),and festing andimpleihentatioh of the 5 new EDi progrn amwith-approximately 250 vendorf. Thii projectis expected to take:

6 approximately four-months'to complete. The set-up cost is $40,000 and the additional

.'7 'estimated cost for irnplemehting the system is'$5_0,O009-. The' set-up cost of $40,000 cannot 8 be avoided even if the. contract is subsequently'canceled before cofnpletionof the project.

9. 'The remaining'$50,000 is baaed-on-time and expenses'and thdrefore-could~be partially or 10 fully avoided upon'contract termination.' , ' "; 4, .. -

11 , ." 8. -The cost estimates set fo'th abovear*ebasdd bn PG&E's initial scoping of 12 the project requirements and'negotiafions with the'.consultants who have been.selbcted .1 to below).

HOWAIRD 13 t6rform the work (or preliminary discussions with the'potential consultants,, as noted MCE NEMEKOV3K A 14 For each of the constiltirig flims,.PG&EW's standard.contr.ictual-provisions in place with these fitins (or to be included in any contracts tobe executed,hereafter) do not guarantee future':'

& RA~K1N "15 16 work'or any riminimum amount ofrevenue. PG&E will~als6 maintain the right to.ter"minate 17 the'work at any time withoutacuse, in which cdae PG&E-is liable. only for work performed 18 to .the date of termination plus costs reasonably incurred by the consultant in terminhting any 19 'work inprogress.. Theie are a fewv exc.ptipins noted above, where PG&E has been unable to 20 obtain the services without payipg An initial set-up :or flat fee, which cannot be recovered if 21 ,thework'is subsequently termindted. In additi6h, th6 software license fees described herein 22 involve one time charges thai'cannot be recovered if the work is subsequently terminated.

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28 DECLARATIONiOF LANCE MAEDA 1

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I declare under penalty of perjury,.of the laws of the United States~that,the, 2 foregoing is true and correct, and that this declaratib~n was executed atb San -Franc'is',

3' California on Septemhber II 2002-.,..

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