ML040280428

Interim Application of Pricewaterhousecoopers Llp for Allowance and Payment of Compensation and Reimbursement of Expenses (September 1, 2002 Through February 28, 2003)

ML040280428
Person / Time
Site:	Diablo Canyon
Issue date:	01/14/2004
From:	Pellervo P Official Committee of Unsecured Creditors, PricewaterhouseCoopers, LLP
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
SF 01-30923 DM
Download: ML040280428 (20)

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10 11 12 13 Patricia W. Pellervo Pri&ewaterhouseCoopers LLP 199 Freinont Street San Francisco, CA 94105 Telephone:

(415) 498-6190 Facsimile:

(415) 498-5156 Accountants and Financial Advisors for Official

-'Committee of Unsecured Creditors S%5-V022

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tA JAN.1 4 2004 IogP.

Y COTRr UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 14 15 16 17 18 19 20 21 22 23 24 25 26 27 In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, Debtor.

Case No. SF 01-30923 DM Chapter 11 INTERIM APPLICATION OF PRICEWATERHOUSECOOPERS LLP FOR ALLOWANCE AND PAYMENT OF COMPENSATION AND REIMBURSEMENT OF EXPENSES (SEPTEMBER 1, 2002 THROUGH FEBRUARY 28,2003).

Hearing:

[No Hearing Scheduled]

28 ot,00

1 TO TILE HONORABLE DENNIS MONTALI, UNITED STATES BANKRUPTCY JUDGE, THE OFFICE OF THE UNITED STATES TRUSTEE, TILE DEBTOR, AND 2

OTHER PARTIES IN INTEREST:

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As previously disclosed to this Court through the Eighth Supplemental Declaration of 5

Mr. Thomas E. Lumsden, on August 30, 2002 (the "Closing Date"), the Business Recovery 6

Services practice (the "BRS Practice") of PricewaterhouseCoopers LLP ("PwC") was acquired 7

by FTI Consulting, Inc. ("FTI"). This transfer included the business, receivables and employees 8

comprising the BRS Piaictice of PwC. This Interim Application for PwC covers the services 9

perf'ormed by PwC personnel that were not transferred to FTI. Michael Hamilton performed the 10 majority of the services billed on this Interim Application. Mr. Hamilton was hired by FTI on 11-March 1, 2003, and since that date, VTI has; billed for his services.

12 As such, PwC respectively submits this Interim Application for services rendered by 13 PwC to the Official Committee of Unsecured Creditors (the "Committee") during the period 14 from September 1, 2002 through February 28, 2003.

1 5 16 INTRODUCTION 17 18 This is the only long-form interim application filed by PwC for approval of compensation 19 and reimbursement of related expensesfor, services rendered on behalf of the Committee during 20 PG&E's chapter 11 case since its BR, P~ractice was sold to FTI. PwC submits this Interim 21 Application in accordance with Bankruptcy Code sections 330 and 331, Rule 2016 of the Federal 22 Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), the Office of the United States Trustee 23 for the Northern District of California Guidelines (the "UST Guidelines"), and the United States 24 Bankruptcy Court Northern District of California Guidelines for Compensation and Expense 25 Reimbursement of Professionals and Trustee ("Court Guidelines"). Through this Interim 26 Application, PwC seeks (i) interim approval and allowance of $102,896 in fees accrued and 27

$23,859 in expenses incurred for services rendered by PwC on behalf of the Committee during 28 the period September 1, 2002 through and including February 28, 2003.

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, During the Interim Application Period, PwC professionals spent a total of 162.4 2

hours rendering services to the Committee in connection with the PG&E bankruptcy case at a blended hourly rate of $634. Michael Hamilton, a partner with PwC, performed the 4

majority of the services for PwC. His york was supported by analyses and research 5

performed and billed by FTI staffpersonnel.,, PwC also incurred $23,859,in costs and 6

expenses in connection with those services, for which PwC is requestingxreimbursement.

7 Accordingly, PwC seeks allowance, andpayment of a total of $126,775,for services rendered and reimbursement of costs and curred during the Interim 9

Application Period. PwC received $111,321 in fees and expenses from itsNovember 26, 10 2003 cover letter application.

All fees and expenses incurred bywprior~to, l

11 September 1, 2002 are reported in FTI's jnterm Application. The services and costs 12 performed by PwC during this Interim application Period are described below and are 13 detailed in the exhibits filed concurrenqy herewith..:

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SUMMARY

OF DEVELOPMENTS IN THE CASE 16 17 On April 6, 2001.(the "Petition Date"), Pacific Gas and Electric Company (the 18 "Debtors") filed voluntaprypetiti6ns fodr re6rga'aona uiiiinde Chapter 11 i f title 11 of the United 19 States'Barikruptcy 66ae ('13 tcy' Covde'ij The tebtoirs~continue fo operate their business 20

-~'rK tiisO108o and ia iage'their properties as deiiodsin-podsessidn plrsGan tSections 1()

1108 of 21 the Bankruptcy'Code.

i.. at-23 On July 2, 2001 this Court entered q9ia er (the"ktention Ord") authorizing, nuncpro 24 6itunceemplo" enedfPwC as of.April 11i, 2001,--a Acc6ii'tants and Findncial'Advisbri f'orthe 25 aom t

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.Coninttee.

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1 The Retention Order authorized the retention of PwC to render to the Committee the 2

following essential services, which include but are not limited'to the following:

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(a)

Assistance to the Committee in the review of financial related disclosures 5

required by the Court, including the Schedules of Assets and Liabilities, the Statement of 6

Financial Affairs and Monthly Operating Reports; 7

(b)

Assistance with a review of the Debtor's short-term cash management 8

practices;,

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' (c)

Advice and guidance to the Committee with respect to utility accounting 10 and'electric and gas utility operating elemerits, including elements of rate making, cost recovery 1 1 and the financial impact of regulatory decisions;'

12' (d)

Ass'istance and advice t6the Commnittee with respect to the value ofthe 13 Debtor's operating assets and make recommendations regarding the highest and best use, 14 operation, and ultimate disposition of such assets; 15 (e)

Assistance in the review of financial information distributed by the Debtor 16 to creditors and others, including, but not limited to, cash flow projections and budgets, cash 17

'receipts and disbursement analysis, analysis of various asset and liability accounts, and 'analysis 18 of proposed transactions for which Courf'pproval is'sought;-

19 (f)

Attendance at meetings and assistance in discussions'with the Debtor, 20 regulators, State agencies, mortgage holders and other secured lenders in this chapter 11 case, the 21 U.S. Trustee, other parties in interest and'professionals hired by the same, as requested; 22 (g)

Assistance in the review and/or preparation of information and analysis 23 necessary for the co'nfirrnationlof a Plan of Reorganization in this chapter 11 case; 24

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': Assistance to tlieCommittee and its counsel in the preparation and 25 evaluation of potential litigation;

--(i) 'Assistance in the dscharge of the Committee's duties and funbtionc I this 27 case, including, but nrot limited to, compilation of material required for court testimony, 'a'nd 28 l 4

1 (j,.

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Renider such other general business co'n'sulting or such other assistance as 2

the Committee or its counsel may deem necessary that are not duplicative. of services provided 3

by other professionals in this proceeding.,

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5 As mentioned above, the Business Recovery Services prapticpe(the,,"3BRS Practice") of 6

PricewaterhouseCoopers LLP (TPwC") was acquired by FTI Consulting, Inc. ("FTI").. This 7

interim application for PwC covers the serfice's performed by.PwC personnel that were not 8

transferred to FTI. PwC incorporates by reference the overview of case activity presented in, 9

Sections II and III of the Interim Application of.Milbank.Tweed Hadley & McCloy LLP fdr 10 Allowance and Payment of;Compensati,ogn ReimbursementofExpenses, The Debtor 11 continues to operate its business, and cash flowfippears.top.eneutral pending regulatory 12 decisions by the California Public Utilities_ Coliiiission. A plan has been confirmed in the case.

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-. SU MA:RY OF

q. 1' R CTICE EXPERIENCE 16 PPwC has extensive experie in.financial reorganizaions, regulatory. accounting and 17 reporting, bankruptcyconsulting and s

ur prcfessionals have. provded services to 18 a wide variety of industries, and as a rescultP.wCa~s a

ltpfknow ledge 19 concerning the intricacies in these matters..., Ir

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SUMMARY

OF SERVICS RES,,,

D BY PWC 23 During the Interim,Application Period, PC represened and.

_,~~pe nte.'ndadvised the'Committee with 24

'respect to a wideirange of issues and challenges.-,Due to thecomppehensive nature of the

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25 services rendered by PwC during the Interim Application Period, no attempt is made, herein'to.

26 detail the totality of such services. The'full scope ofth' services rendered by PwC is set forth in

• '27 detail in the billing repprts filed concurrently herewith under captions entitled :..

28 "PricewaterhouseCoopers LLP's Time Records Exhibit for the Period September 1, 2002 to' 5

I February 28, 2003" (the "Billing Reports"). However, in order to assist the Court, the United 2

States Trustee, PG&E and other parties in interest in reviewing this Interim Application, a brief 3

summary of PwC's billing procedures, and the services rendered'by PwC during the Interim 4

Application Period with regard to each activity code category, including certain undertakings 5

withinleach category, is set forth below.

6 A.

Summary of PwC's Billing Procedures.

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It is PwC's normal business practice to charge its clients in fuill for services rendered and 9

all actual and necessary out-of-pocket costs and expenses incurred by PWC in providing those 10 services.

In the ordinary course of its practice, PwC maintains records'of time expended by 12 13 professionals in rendering services to its clients. Time records are made substantially contemporaneously with the rendition of these professional services and are prepared by the 14 professionals who have rendered the services. In matters such as this, time records are kept in 6 15 minute (.1 hour1.157407e-5 days <br />2.777778e-4 hours <br />1.653439e-6 weeks <br />3.805e-7 months <br />) increments.

1 6 17 This case, which is one of the ten largest bankruptcy cases filed in the United States, has 18 involved significant interaction with outside agencies, including the Federal Energy Regulatory 19 Commission, the California Public Utility Commission ("CPUC"), the California Energy 20 Comrnmission, the Department of Water & Power ("DWR"), the State Legislature, the Governors 21 Office, as well as taxing authorities and other reporting agencies.

22 23 Michael Hamilton is PwC's senior Utility Specialist in Accounting and Regulatory Matters. He has participated in each of the restructurings that have involved a utility for the Firm 24 over the past 25 years. He has uniquie knowledge of the regulatory and business environment 25 facing utilities. Mr. Hamilton has coordinated the Committee work on plan structuring, 26 2 regulatory matters, cash flow projectivnit and legislative rnatters.

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-The remaining services provided by PwC relate to research and support on tax issues of 6

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the two plans filed in the case.

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Siummary of Exhibits Regarding Services Rendered By PwC.

PwC has attached the following bxhibits as'§ upp6it 'to its Application:

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Exhibit 1 - A summary schedule showing the professionals who performed the services, the number of hours spent, the respective professional's billing rate, and the total fees for such services;

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Exhibit 2 - SumrGary of Fees by Project Category and itemized time records, in

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chronological order, of each specific service for which an award of compensation is sought. The itemized record includes: (1) the date each service was rendered, (2) the professional(s) who.;

performed the service, (3) a description of the services rendered, and (4) the time spent performing the service in incrcn~efits of tfithstof an hour 'for' this Initerini'Application;

'- Exhibit3a-Expense SuimaryAftddExpefnse Detail I

ports byindividual and itemized total exenses for which teimbutrsemet is'sought. All expenses for which reimbursements are sought are disclosed in detail by individuale it should be'noted that 'any airfare charges were incurred as a result of travel in coach clais. PwC has not requested reimbursement for certain out-of-pocket expenses when it would not be possible.to assemble the billing details for reimbursement under the Guidelines. These unbilled out-of-pocket expenses typically include telephone charges for calls placed in its offices, postage costs including Federal Express charges and copying and facsimile charges incurred at the Applicant's offices in, connection with these cases. These unbilled out-of-pocket expenses are real costs that have been incurred by PWC and have benefited the Estate; and C.-- Narrative'Summary Of Services Pr6ovided*ByPWC.

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-'PwC has submitted detailed listings of6time incurred by professional by task forthe monthly Cover Sheet Applicafions to th6'Debior, Committee, the Uh;tedrSfatesTrnustee and the Court for the period covered by this Fourth Interim Application. PwC has reclassified some of 7

1 the detailed time into categories that more appropriately reflect the work performed.

2 Reclassification were made to harmonize the categorization among professionals.

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Cash Flow Analysis (Category 01).

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During the Interim Application' Period, PwC professionals spent a total of 1.3 7

hours rendering services in this category, for which PwC seeks compensation of $832. A 8

sumnmary of the PwC professionals who rendered services in this category and the corresponding 9

amount of fees requested is included in Exhibit "2." The Billing Report for this category, which 10 sets forth a detailed description of the services rendered,. is filed concurrently herewith.

12 l Services rendered by PwC professionals in this category included:

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PwC analyzed the Debtors' cash flow forecasts to develop an 14 understanding of the Debtor's liquidity position and its ability to generate sufficient cash to fund 15 the proposed Plans of Reorganization and required capital expenditures.

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CPUC Plan of Reorganization (Category 02).

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' During the: hiterim Application period', PwC professionals spent a total of 10.7 19 hours2.199074e-4 days <br />0.00528 hours <br />3.141534e-5 weeks <br />7.2295e-6 months <br /> rendering services in this category, for which PwC seeks compensation of $6,848. A 20 summary of the PwC professionals who rendered services in this category and the corresponding 21 amount of fees requested is iniluided in Exhibif "2." The Billing Report for this category, which 22 sets forth a detailed desdripti6n 6f the serVices rendered is filed concurrently herewith.

23 24 Services rendered by PwC professionals in this category included:

25 9 ; ' a) PwC reviewed the CPUCplan and helped in the preparation of the trial 26 memorandum filed by the OCC in support of the CPUC plan. Mr. Hamiitobi's knowledge of 27 '

regulatory issues was critical in the preparation of the OCC's trial brief.

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CPUC Review (Category 03)...

During the Interim Application period, PwC professionals spent a total of 0.9 hours1.041667e-4 days <br />0.0025 hours <br />1.488095e-5 weeks <br />3.4245e-6 months <br /> rendering services in this category, for which PwC seeks compensation of $576. A summary of the PwC professionals'who rendered services in this category and the corresponding

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amount of fees requested is included in Exhibit "2." The Billing Report for this category, which sets forth a detailed description of the sel-vices rendered is filed boncur'rently herewith.

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's Services rendered by PwC professionals in this category included:

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a. ~'*PwC reviewVed m~atbialfiled CPUS proeedings to determihe the potential financial.impact the proceedings ccould have-on the D'btor and the Plansf 6FReorganizatioh uider consideration.

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CPUC/OCC Plan of Reorganization (Category 04).

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.. Duringhe Int dm-ApplicatiohPeriod; IwC'professionals spent a total of 115.5 hours5.787037e-5 days <br />0.00139 hours <br />8.267196e-6 weeks <br />1.9025e-6 months <br /> rendering servic'sin this 'cteg6ry~ifor.which PwC 'seeks'c ompensdtion of $73,530. 'A summary of the PwC professionals who rendered services in this category and the corresponding amount of fees requested is included in E Mit~2." Th&'Bigling Report for this category, which sets forth a detailed.descrip,¶ion pf thepsericgesrendered is Iled concur renty herewith.

Secsiendered IywC professiois in. ibis catfeory iriluded

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,; Mr. Hamilton spent rponside,le,time in this category.consulting with the lCommittee, the. Committee is professionals, theCqp a

itprfsonlSPnd FNTI on' joint plan structures and steps needed to insure both confirmation and acceptable credit ratings; l

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• I Mr. Hamilton was also actively involved with UBS Warburg in developing an accurate joint plan model.,He was instrumental in thje preparation of FTI's (Thomas Lumsden's) testimony in l,uppor f o flthe JointwPlan.

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- b) 'by'Harni'ton was active in mneetings wihte rating agencies to support and 9

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articulate concepts proposed under the Jolnt Plan.

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Debtor Plan of Reorganization (Category 05).

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During the Interim Application Period,'PwC professionals spent a total of 16.7 5

hours rendering services in this category, for which PwC seeks compensation of $10,688. A 6

summary of the PwC professionals whd rendered services in this category and the corresponding 7

aamount of fees requested is included in Exhibit "2." The Billing Report'for this category, which 8

set forth a detailed description of the services rendered are filed concurrently herewith.

Services rendered byTPwC in' thfs;'category included:

10 a) Monitored activity regarding the Debtor's Plan of Reorganization, including 11 Go

!..: e;i attending court hearings, reviewing depositions for the confirmation trial, and reviewing new 12

. I-materials submitted as support for the Debtor's plan. PwC's work in this category was used to advice the OCC on the Debtor's Plan progress and the reasonableness of the Plan being 14!

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This work was also instrumental in understanding what drivers might be used to incite the Debtor in a Settlement Agreement.

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DWR Contracts Analysis (Category 06).t-'

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.$ During th6(Interim Applicatio tiPeriod, PwC(professiobnls spent a total of 1.8 hours9.259259e-5 days <br />0.00222 hours <br />1.322751e-5 weeks <br />3.044e-6 months <br /> rendering services in this category;jfor'Which PwC seeks compensation of $1,152. A 20 summary of the.PwC professionals wh'o 'rendered services' in this category an'dthe"c6rresponding 21 amount of 'fees, requested-is iinluded in Etxhibit "2." The Billing Report for this category, which 22 sets forth a detailed description dfd the services rendered' is filed 'concurre'ntly herewith.-'

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Services'rendered by PlwC professionals in this category included:

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' i a)

PwC reviewed the S&P'credit rating analysis on th6 DWR bond issuance

>226 to' determine if the DWR contract'costs' assumed in the two competing Plans were in line wiih final bond costs. The DWR issuances were also seen as a proxy for the potential costs and' 28 10

1 market appetite for bonds issued under either of the Plans under consideration.

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FERC (Category 07).

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4 During the Interim Application,Period, PwvC professionals spent a total of 3.3 hours3.472222e-5 days <br />8.333333e-4 hours <br />4.960317e-6 weeks <br />1.1415e-6 months <br /> rendering services in this category, for which FTI/PwC seeks compensation of $2,112. A 6 ',summary of the PwC professionals who rendered services in this,categoryzand the corresponding 7

amount of fees requested is included in Exhibit "2;" The Billing.Report for. this category,.vhich sets forth a detailed description'of the services rendered, is filed concurrently herewith 8

.et forth a detailed.

Services rendered by Pw professionals in thiscategory included:

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'a)

PwC monitored FERC proceedings to determine the potential financial I I !

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12 impact of regulatory proceedings on the Debtor's Estate, including possible changes in rates, 13 generator refunds, settlement of the California PX/Generator claims, and progress on the 1oi

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14 Debtor's filings requesting FERC approval for various aspects of its Plan of Reorganizatio'n.

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General Committee Alatters.(Category 08).:,

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,During the Interim'Applicatijri Period;P.w.C professionalgispent a total of 7.2 19 h6urs rendering services in thils category,4fpryNy ichwC.seeks compensation of $4,608.,A' 20

, suniry o the lC professionals.wpho ¢enderel srcesin,,this category.and the corresp oding amount of fees requested is included in 2Ex2hibi0-'.'1 The1IBilling Reportfor this category, which 22 sets.forthMadetailed description of the services.exnder~edis,f~ied concurrentlybherewith.

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......Services,rendered by.PwC professionaksjiste~d in this category included:

25 a)..

PwCprepared for and attended numerous meetings and conference calls' 26 full Comiitteeon.various

issues, including'general case admiuistfration,.financial'. i..

27 issues, regulatory issues, litigation issues and Plan issues.,

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1 b)

PwC personnel prepared for and participated in various formal and 2

informal conference calls between Committee members, Committee working group members, 3

Committee advisors and PG&E regarding the financial impact of various motions brought by 4

PG&E, the Debtor's and the CPUC's proposed plans of reorganization, the OCC's alternative 5

plan and other issues surrounding the Debtor's estate.

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Tax Review (Category 09).

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• l During the Interim Application Period, PwC professionals spent a total of 5.0 9

hours rendering services in this category, for which PwC seeks compensation of $2,550. A 10 summary of the PwC professionals who rendered services in this category and the corresponding amount of fees requested is included in Exhibit "2." The Billing Report for this category, which 12 sets forth a detailed description of the services rendered is filed concurrently herewith.

13 Services rendered by PwC professionals listed. in this. category included:

14 15 a)

PwC reviewed, analyzed and summarized tax consequences of the 16 proposeds plans of reorganization.

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PwC researclieci'and summarized key tax issues of the Debtor's Plan of

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reorganization for the Cofimittee6and the tax impact of alternative plan proposals, highlighting 19 the potential financial im&phcton' the Debtor-and any potential tax liabilities to the creditor. PwC 20 also kept the Committee appraised of the status on IRS submissions and the implications of the 21 CPUC's proposed tax sharing'agreement.

22 23 IV 24

SUMMARY

OF ACTUAL AND NECESSARY EXPENSES. INCURRED BY PWC 25 PwC maintains records of all actual and necessary out-of-pocket expenses 26

.incurred and, typically charged in connection with rendering-professional services to its clients in 27 the ordinary course of its business practice. As is typical of PwC's practice when representing 28 12

creditor committees, PwC has reduced to cost or not charged certain of these out-of-pocket 2

expenses to the estate in accordance with the UST Guidelines and the Court Guidelines and to ensure the reasonableness 'of PwC's fee and expense requets:. A brief explanation of certain 3

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costs incurred and charged to the estate is set forth below:

(a)

PwC does not charge its cli'ents for photoc`opyin'g done in-house; copying 6

done by third-party services is charged at cost,,

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(b)

PwC charges its clients for document retrieval services, computer research 9

and other specialized searches and services, such as messengers and library retrievals, at cost; 10

' ' ^ (c)

-'PwC charges its c ients ir mileage ($0.345 per mile, if souight) and 1 1 parkingcosts'incu'rred byits'professio'nal~iin connectioh'x~with servicesirndered atcost, 12 : &parking css in it:

at cost; 13 (d)

PwC charges its clients fortransportation and travel-related costs 14 including'out-of town mAeal's; ex' I

h 9 timud by its professionals when working on 15 specific client matters, at cost, and 16 (e)

PwC normally charges its clients foi'jfhe ist of 6Vertime and weekend 17 meals and transportation when pressing client matters require.the professional to work past 18 l normal office hours; however, in accordance with the UST.Guidelines and the Court Guidelines, 19 no such charges are included in this Fourth lnt*mApplication 20 21 e

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22 COMPENSATION REQUESTED AN)D ATLEGALSTANDARD 23 To grant a request for compensation pursuant to Bankruptcy Code section 330, 24 the Court must find that such request is reasonable The reasonablenessdof a compensation 25141(trequest is determined by the "lodestar" method.. See In re Yermakov. 718 F.2d 1465, 1471 (gth 26

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27 CCir..1993). Under the lodestar approach '"reasonable"compensation-is calculated by,! '.

multiplying the number of hours reasonably expended by the hourly rate of the professional. h 28 13

1 re Rheuban, 121 B.R. 368, 383 (Bankr. C.D. Cal. 1990). There is a strong presumption that the 2

lodestar product is reasonable under Bankruptcy Code section 330. See In re Drexel Burnham 3 l Lambert Group, Inc., 133 B.R. 13, 22 (Bankr. S.D.N.Y. 1991).

The reasonableness of a professional's hourly rate is based on the cost for 5 comparable services charged in the area, in r'on-bankniptcy matters. See In re Yermakov, 718 6 l F.2d at 1471. The'reasonableness of the hours expended on a task is based on whether the services provided were actual and necessary. See In re Nucorp Energy, Inc., 764 F.2d 655, 658 8

-(9~ Cir. 1985).

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10 l PwC's fees are reasonable given the size and complexity of the bankruptcy case and are commensurate with the fees that PwC has been awarded in comparable chapter 11 cases 12 l and that accountants and financial advisors of comparable experience and expertise charge on a 13 l regular basis to represent creditor committees in comparable chapter 11 cases. Accordingly, 14 utilizing the lodestar method, PwC's fee and expense request is reasonable and should be allowed and paid pursuant to' Bhnkruptcy Code section 330. See Drexel, 133 B.R. at 22.

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.;..VI...-.

4 CONCLUSION For the reasons set forth above and pursuant:to Banuptcy Code sections 330 and 6

331, Bankruptcy Rule 2016, the Court Guidelines; the UST Guidelines and the standards adopted by courts in awarding accountants', and financial advisors' fees and costs, PwC submits that the 8

fees for services rendered and costs and expenses incurred on behalf of the Committee during the Application Period in the total amount of $126,775 are reasonable and should be allowed 6n an 10 1

interim basis' and 'pad in full' l intenm

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'HMIEREFORE PvC, respec tfully requests that ts Cou enter an order:

l1Angrovm Is i,,Inten4m Application in its entirety; 15

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pproving aninterin_,awatrd.ofcompensation.in the amount of$102,896 16' for professional services rendered and reimbursement of costs and expenses incurred in the 17 amount of $23,859, for a total amount of $126,755.

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3.

Authorizing and directing PG&E to immediately pay to PwC the allowed 19 l amounts, less any such amounts already paid pursuant to the Order Establishing Interim Fee 20 Application and Expense Reimbursement Procedure; and 21 22 23

4.

Granting such other and further relief as the Court deems just and proper.

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9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DATED: January )-, 2004 Respectfully submitted.

PricewaterhouseCoopers LLP By:_________

Patricia W. Pellervo Accountants and Financial Advisors to Official Committee of Unsecured Creditors 16

1 CERTIFICATION 2 {

I, Patricia Pellervo, am the professional designated by PricewaterhouseCoopers 3

LLP to ensure compliance with the United States Bankruptcy Court Northern District of 4

California Guidelines for Compensation and Expense Reimbursement of Professionals and Trustee ("Court Guidelines").'I am repacinig Toni Lumsden, as the engagement partner for PricewaterhouseCoopers LLP in'connections with this matter. I certify that (a) I have read the Interim Application; (b) to the best of my knowledge, information and belief, formed after

'reasonable inquiry, the compensation and expense reimbursement sought is in conformitywith 9I the Court Guidelines, except as specifically noted in the Application; and (c) the compensation 10 and expense reimbursement requested are billed at rates, in accordance with practices, no les's favorable than those customarily employed byPwC and 'generally accepted by PwC's clients.

12 13 DATED:

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o o

d 15 16 17 18 19 20-21 22 23....-..i.'

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1 DECLARATION OF PATRICIA W. PELLERVO 2

I, Patricia W. Pellervo, declare:

3 4

1.

I am over eighteen years of age and, if called upon, I could and would 5

testify competently to the matters set forth herein. I am a principal in the professional services 6

firm of PricewaterhouseCooper's ("PwC"), and have replaced Thomas E. Lumsden as the partner 7

responsible for the firm.ss services as accountant and financial advisor to the Official Committee

-of Unsecured Creditors ("Committee") in the Pacific Gas and Electric Company ("PG&E")

9 chapter-11 case. In preparing this declaration, I have relied on my personal knowledge and on 10 my review of the billing records and files iiiaintained by PwC in the 'ordinary course of business 11 and made by PwC professional staff substantially contemporaneously with that person's 12 performance of services or incurrence of costs on behalf of the Committee.

13

2. ' ' This declaration is submitted in support'of the "Interim Application of 1 4 PricewaterhouseCoopers LLP For AlloWance and Payment'of Compensation And 15 1 i _

Reimbursement of Expenses (September 1, 2002 Through February 28, 2003)" (the "Interim 16 Application"). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Interim Application. This Interim Application covers the period from September 1, 2002 through and including February 28, 2003 (the "Interim Application Period")., I have read 19 the Interim Application and reviewed the exhibits thereto, and each of the facts contained therein 20 is true and correct.

21 22

3.

PricewaterhouseCoopers LLP's Time Records Exhibit for the Period 23 September 1, 2002 to February 28, 2003, filed concurrently herewith, attaches true and correct 24 copies of records maintained by PwC in the ordinary course of PwC's business operations and 25 reflects entries that were made substantially contemporaneously with the rendering of the 26 services.;

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4.

Pursuant to the Interim Application, PwC seeks allowance 6f 28 18

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3

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6 7

8 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 compensation covering 162.4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br /> of professional time devoted to advising the Committee in PG&E's bankruptcy case, resulting in the accumulation of $102,896 in fees for professional services rendered and $23,859 for expenses incurred, for a total amount of$126,755.

5.

PwC received no pre-petitio'n retainer in connection with this bankruptcy case.

,..~ ~ ~~

>¶ I

6.

PwC has submitted monthly fee notices in accordance with the interim fee procedures that were established by the Court. PwC has received paymentsptotaling $111,321 in connection with the Monthly Cover Sheet Applications covering the period.September 1, 2002 to February 28, 2003, comprised of $87,462 in fees and $23,859 in expenses.

' 7

';No ement or understanding of any idhi or nature exists between"FTI and any other person-or e'nit efor'the shahngodirsion payientonypfrtion ofdie

compensation awarded to PwC for services rendered or expenses incurred in connection with our representation of the Committee in this chapter I11 proceeding, pxcept.as among the employees and partners of PwC.

t X '

i 8.

1 am one of the desig'natdprofessionals responsible for overseeing the billing in' thi's matter iand for assuring compliance with the' Guidelines of the Office of the United States Tru'stee 'foIlt ieNor hrn Disthit laf C iifia relatirig to billng (the 'Guidelines").

m'y review'of this Jhtrir'nApjl5'atidn submittedby PwC for the Application Ppiod, I believe that the Interim Application complies with the Court Guidelines and the UST Guidelines.

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'.v; i<

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if Wtfeahed hereto as tfibif 1' is a siiinmaiy of the total hours expended, billiniirate, an dfees inicurred by edch PwC profspsionalgduring' th ppplication Period.'

10.

Attached hereto as Exhibit "2" is a summary of each category of services, setting forth the namefof each professional who expended time in that category and the total hours and amount billed by each professional in'that category during the Application Period.

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1

11.

Attached hereto as Exhibit "3" are Expense Summary and Expense Detail 2

reports by individual and itemized total expenses for which reimbursement is sought.

3 I declare under penalty of perjury under the laws of the United States of America 4

that the foregoing is true and correct.

5 6

Executed this 12th day of January, 2004 at San Francisco, California.

7.

9 Patricia W. Pellervo 10 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 1

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