ML040260523
| ML040260523 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 01/15/2004 |
| From: | Wan F Howard, Rice, Nemerovski, Canady, Falk & Rabkin |
| To: | Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California |
| References | |
| 01-30923 DM, 94-0742640 | |
| Download: ML040260523 (4) | |
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9 10 JAMES L. LOPES (No. 63678)
GARY M. KAPLAN (No. 155530)
HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Professional Corporation Three Embarcadero Center, 7th Floor San Francisco, California 94111-4024 Telephone:
415/434-1600 Facsimile:
415/217-5910 Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 11 12 flONIlD 13 RNE Go 14 Aflffda,.
1 J 16 17 In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, Debtor.
Federal I.D. No. 94-0742640 Case No. 01-30923 DM Chapter 11 Case Date:
February 9, 2004 Time:
1:30 p.m.
Place:
235 Pine Street, 22nd Floor San Francisco, California Judge:
Hon. Dennis Montali 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF FONG WAN IN SUPPORT OF DEBTOR'S MOTION FOR ORDER APPROVING SETTLEMENT AGREEMENT AMONG THE DEBTOR, ENRON CANADA CORP., ENRON ENERGY MARKETING CORP.,
ENRON ENERGY SERVICES, INC., ENRON NORTH AMERICA CORP.
AND ENRON POWER MARKETING. INC.
FONG WAN DECL. ISO DEBTOR'S MOTION FOR APPROVAL OF ENRON SETTLEMENT AGREEMENT
1 I, Fong Wan, declare as follows:
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- 1.
I am the Vice President of Risk Initiative at PG&E Corporation, the parent 3
company of Pacific Gas and Electric Company, the debtor and debtor in possession in the 4
above-captioned Chapter I1 case ("PG&E" or the "Debtor). This Declaration is based on 5
my personal knowledge of PG&E's and PG&E Corporation's general operations and 6
practices and policies, and upon my review of their respective records concerning the 7
matters stated herein. If called as a witness, I could and would testify competently to the 8
facts stated herein.
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- 2.
I make this Declaration in support of the Debtor's motion (the "Motion")
10 for entry of an order approving a certain Settlement Agreement And Limited Mutual Release 11 (the "Settlement Agreement") by and among PG&E on the one hand, and Enron Canada 12 Corp. ("ECC"), Enron Energy Marketing Corp. ("EEM"), Enron Energy Services, Inc.
HOWARD 13
("EES"), Enron North America Corp. ("ENA") and Enron Power Marketing, Inc. ("EPMI")
cue 14 (collectively, the "Enron Parties"), on the other hand.1 BUc 15
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As discussed in greater detail in the Motion, the Settlement Agreement (a 16 true and correct copy of which is attached hereto as Exhibit A 2) resolves numerous claims 17 and related disputes between PG&E and the Enron Parties, including claims filed by the 18 Enron Parties in PG&E's bankruptcy case aggregating approximately $1.035 billion.3 19
'Capitalized terms not defined herein have the meaning ascribed to them in the 20 Motion or (if not defined therein in) the Settlement Agreement.
21 2PG&E is not attaching copies of the Settlement Agreement to the service copies of this Declaration because it is too voluminous. However, PG&E will make copies of such 22 document available to anyone being served with the Motion and this Declaration. Any person served with this Motion and this Declaration may obtain a copy of the Settlement 23 Agreement by written request by mail to Howard, Rice, Nemerovski, Canady, Falk &
Rabkin, Attn: Nathaniel H. Hunt, Three Embarcadero Center, 7th Floor, San Francisco, 24 California 94111-4024, or by e-mail request to nhunt@howardrice.com. Additionally, copies of the Settlement Agreement will be available at the hearing on the Motion if any 25 other person wishes to review it.
3This Declaration contain a general discussion of the terms and conditions of the 26 Settlement Agreement intended to assist the Court and parties in interest in understanding the Settlement Agreement, but is qualified in its entirety by the actual language of the 27 Settlement Agreement itself. In the event of any actual or perceived inconsistency between any provisions of the Settlement Agreement and the discussion provided herein, the 28 provisions of the Settlement Agreement shall be controlling.
FONG WAN DECL. ISO DEBTOR'S MOTION FOR APPROVAL OF ENRON SETTLEMENT AGREEMENT 1
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In broad terms, the Settlement Agreement, among other things, provides for, claims of the Enron Parties aggregating approximately $1.035 billion4 to be allowed in a maximum aggregate amount of $345 million, which amount can decrease to approximately
$284 million (or even less) based on certain adjustments, while providing for the release of PG&E claims currently aggregating approximately $73 million on their face, plus additional unliquidated amounts. The Settlement Agreement also contains broad mutual releases by the parties, while expressly preserving certain matters. Among other things, PG&E is preserving all claims against the Enron Parties (except EES and EEM) and their affiliates relating to issues raised in Federal Energy Regulatory Commission ("FERC") proceedings regarding alleged violations of the Federal Power Act or Natural Gas Act, dysfunctions or potential manipulation of the Western gas or electric markets by Enron, its affiliates and others, and all claims of PG&E arising from transactions in the markets operated or administered by the PX and/or the CAISO.
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The Settlement Agreement is the culmination of more than two years of negotiations between PG&E and the Enron Parties. The Settlement Agreement is extremely broad in scope and resolves numerous complex issues between PG&E and the Enron Parties.
If the Settlement Agreement is not approved, PG&E intends to continue litigating many of the issues that are resolved by the Settlement Agreement, presumably at substantial expense and inconvenience to both the parties and the Court. As discussed in the Motion, PG&E anticipates that such litigation would raise many complex and challenging issues, including regarding the validity and appropriate amount of various claims asserted by the Enron Parties in this case, as well as various claims asserted by PG&E in the Enron Bankruptcy Cases. These complex issues would presumably require extensive analysis and testimony and result in protracted and costly litigation. The Settlement Agreement eliminates such As discussed in the Motion, the Settlement Agreement does not resolve a claim by one of the Enron Parties asserted in an unliquidated amount estimated at approximately $30 million based on the purchase of electricity or ancillary services by PG&E in markets operated by the California Power Exchange Corporation (the "PX") or the California Independent System Operator Corporation (the CAISO").
FONG WAN DECL. ISO DEBTOR'S MOTION FOR APPROVAL OF ENRON SETTLEMENT AGREEMENT 1
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-28 unnecessary expense, inconvenience and delay.
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As discussed in detail in the Motion, the Settlement Agreement: (i) provides for claims of the Enron Parties aggregating approximately $1.035 billion to be allowed in a maximum aggregate amount of $345 million (iQe., a reduction of at least $690 million),
which amount can decrease to approximately $284 million (or even less), by fully resolving approximately $524 million of claims filed by the Enron Parties in a maximum allowed amount of $315 million, and limiting recovery on another approximately $511 million of claims filed by the Enron Parties to a maximum of $30 million, and (b) fully resolves most of the claims filed by PG&E in the Enron Bankruptcy Cases, which currently aggregate approximately $73 million on their face, without the expense, risk and delay inherent in continued litigation. In my opinion, such avoidance of unnecessary litigation will benefit PG&E and its creditors by minimizing costs and delay and allowing PG&E's personnel to focus on more critical functions. The Settlement Agreement also avoids the risk that the claims of the Enron Parties will be allowed against PG&E's estate in amounts greater than the settlement amounts, as well as the risk of a lower net recovery for the estate with respect to the PG&E claims against the Enron Parties resolved by the Settlement Agreement.
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Based on the foregoing, I believe that the Settlement Agreement is in the best interests of PG&E and its bankruptcy estate.
I declare under penalty of perjury under the laws of the United States of America and the State of California that the foregoing is true and correct. Executed this 15 day of January, 2004 at San Francisco, California.
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FONG WAN WD 011304/1-1419954/11243101v2 FONG WAN DECL. ISO DEBTOR'S MOTION FOR APPROVAL OF ENRON SETTLEMENT AGREEMENT