ML042100430

Notice of Application & California Power Exchange Corporation'S Application for Payment of Professional Compensation & Reimbursement of Expenses Under 11 U.S.C. 503(b)(3) & (4); Memorandum of Points and Authorities; Declarations of Cohen, R

ML042100430
Person / Time
Site:	Diablo Canyon
Issue date:	07/20/2004
From:	Miriam Cohen Kaye Scholer, LLP, Reorganized California Power Exchange Corp
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
01-30923-DM, 94-0742640
Download: ML042100430 (20)

Text

Marc S. Cohen, Esq. (CASB 065486) I TO THE HONORABLE DENNIS J. MONTALI, UNITED STATES BANKRUPTCY Ashleigh A. Danker, Esq. (CASB 138419)

Conine J. Rebhun, Esq. (CAS8 211647) 2 JUDGE, REORGANIZED DEBTOR PACIFIC GAS AND ELECTIC COMPANY, THE KAYB SCHOLER LLP 1999 Avenue of the Stea, Site 1700 3 OFFICIAL UNSECURED CREDITORS COMMrirTE, THE UNITED STATES TRUSTEE, Los Angeles, Califintia 900674048 Telephone: (310) 783-1000 4 ALL PARTIES REQUESTING SPECIAL NOTICE, AND OTHER PARTIES IN INTEST:

Tdeaier. (310) 781-1200 5 PLEASE TAKE NOTICE that on September 20,2004 at 1:30 p.m., or as soon thereafter as Attorneys for Creditor, Roged California Power Exchange Corporation 6 counsel may be heard by the Honorable Denmis I. Montald, United States Bankruptcy Judge, in

. 7 Courtroom 22, located at 235 Pine Street. 22nd Floor, San Prancisco, California, the Reorgaized UNIED STATES BANKRUPTCY COURT B Cadifomai Power Exchange Corporation (CalPX") shall apply, and hereby does apply (the NORTHER DISTRICT OF CALIFORNIA 9 "Appllcation),to the Court for an Order granting payment of compensation and reimbursenent of SAN FRANCISCO DIVISION 10 costs to CaIPX in the amount of $516,91 1.51 under II U.S.C. §§ 503(bX3) and (4) (the "Substantial Inre ) CaeNo.01-30923-DM II 11 Contribution Claim) in midng a substantida contribution to the successal reorganization under Inre PACIFIC GAS AND ELECTRIC ) Chapter 11 I12 chapter 11 of the Bankruptcy Code of Pacific Gas and Electric Company ("PG or the.Debtor.

W-COMPANY, a California corporation, t .i 13 The Application is based upon this Notice of Application and Application, the attached 0 Reorganized Debtor. Status Conbrence:

0

) Date: Ste mber 20,2004 3itl 14 Meorandumn of Points and Authorities and Declarations of Marc S. Cohen, Conine J. Rebbun, and Federal Id. No. 94-0742640 Time: 1 30pmn.

C) Place: 235 Pine Street, 22nd Floor (1) IlS 1s Michael Schek, the concurrently filed Appendix of Exhibits, the records and files in tis case, and LI) San Francisco, CA I 219 16 such additional evidence and argument as may be presented at orbefore the hearing on the Ne 17 Application.

NOTICE OF APPLICATION AND THE CALIFORNIA POWER EXCHANGE IS PLEASE TAKE FURTHER NOTICE that the hearing on September 20, 2004 on the CORPORATION'S APPLICATION FOR PAYMENT OF PROFESSIONAL COMPENSATION AND RRIMBURSEMENT OF EXPENSES UNDER 11 U.S.C. gf 503(b)(3) 23 19 Application shall be stats nferce oniv. Ineaddition, by agreement between CalPX and AND (4); MEMOR.ANDUM OF POINTS AND AUT[IORITIES; DECLARATIONS OF MARC S. COHEN, CORBuIN J. REBHUN, AND PG&E, memorialized in a letter dated June 21, 2004 to VirginiaBelli, Courtroom Deputyto Judge NIIC15L SC}IRNK lNSUPSPORT TllEIMOF 21 I22

[Appendix of Exhibits filed conturntly herewith]

23 1/

24 tll 25 'I, 26 "Il 27 111 28 I 2 n1NWD CalPre Re*wK for Psrwd dButonvoW Cmulbatim Claim "INa~gWIFF Call`X's Request fir PrAwl of Substmlial CmtnNWm Claim gwj

Montali, aul accepted by Judge Montali, a modified brieflne schedule with respect to the TABLE OF CONTENTS 2 Applicatioa is in effect as follows: (i) oppositions, if any. shall be filed and served on or before 2

3 August 24, 2004 and (ii) CadPXs rcply(ies), if any, shall be filed and served on or before I. INTRODUCT7oN ............................................. . . 4 3

4 September 13, 2004. 4 IL BACKGROUND ............................................. , 6 5 5 THE ROLE OF CALPX AND THE PARTICIPANTS COMMITTEE .

Ill.

6 Dated: Julyj2__ 2004 6 TV. ARGUMENT..10 7 KAYB SCHOLER LLP 7 A. A Creditor Making a Substantial Contribution to a Chapter 1I Case Is Entitled Marc S. Cohen to an Administrative Expense Claim Pursuant to It US.C. §§ 503(bX3XD) a Ashleigh A. Danker S and 503(bX4) ....................................................... 10 Corine J. Rebhun 9 9 B. The Substantial Contribution Test ....................................... 11 10 10 V.

SUMMARY

OP COMPENSABLE SERVICES . . 12 By:

II Marc S. Coben I1 1. CalPX played a major and constructive role in resolving multiple Attorneys for Creditor, the objections to PG&E's various applications under FREP 2004 for l 12 Reorganized California Power Exchange Corporation 12 production by CalPX of confidential and highly sensitive infoination concerning the Participants .. 14 j 13 Li 13

-.1 2. Through pleadings and negotiating PG&E's Plan and Disclosure 0 0

• 14 I 14 Statement, counsel for the Participants Committee substantially contributed to the PG&E case .16 (U) 15 U) 15 LAI U) 3. Kaye Scholer's work with a special subcommittee of the PG&E

>- 16 16 Committee substantially contributed to the PG&E case by resolving issues with proposed versions of the PG&E Plan .1 8 e 17 17

4. CaIPX through the Participants Committee, substantially contributed to the I1 18 PG&E case by challenging PG&Z's motion to estimate Participant claims . 19 19 19 5. By assisting PG&E in the creation of voting procedures to deal with the Class 6 claims, CalPX, thmugh the Participants Committee, substantially contributed to 20 20 the PG&E case 20 21 21 6. Through its counsel, the Reorganized CalPX made a substantial contribution to the PG&E case by assisting with the creation of the Class 6 escrow account .. 20 22 22

7. Te Reorganized CaIPX is entitled to reimbursement for time set 23 23 preparng the Substantbi Contribution Claim .21 24 24 VL CONCLUSION .22 25 25 DECLARATION OF MARC S. COHEN .23 26 26 DECLARATION OF CORRJNE J. REBEHUN .36 27 27 DECLARATION OF MICHAEL SCHENK .38 28 28 3 an 2304.W1O CaIPXaRequest 8w ayfteast of SitaraCaibues UIS4S.WP - CIPXa' Requst for Payment of Subatial Cot&baim aim WWW10D CdPX . Re fo rPyon fSbanbai am*d Cah

I TABLE OF AUTHORITIES MEMORANDUM OF POIRTS AND AUTHORITIES 2 2 Page 3 CASES 3 1.

4 4

• qNTROD UC O 87FRC 161,203(1999) .......................... 4 S I5 As the Court is aware, this chapter I1 case is unusud and highly complex. presenting ClIrisinu Wie Caft imwson Wm cm m v. Son (n re Cistian Ufa Center).

6 821 F.2d1370(9th Cir.1987.) ..................... 11,12 6 nmerous 'blockbuster" legal issues with billions of dollars at stake. The Interplay between (i) the 7 In re COt tofOrlnx ' 7 jurisdiction of the Banikuptcy Court, the Californis Public Utilities Commission (TCPUC'), and the 179 BIL 195 (Bankr. C D. Cal. 1995) ..................... 12 8 Federal EnRy guty Commission (FPRC mnd (ii) tbe competng banauptcy estates of lre~h~r hvng.1c 9 764 F.2d655 (9th CL. 19S5) ..................... 21 9 PG&E and CadPX created special challenges with respect to PG&E's assets, liabilities and 10 10 operations and in proposing and confinming PG&E's plan of reorganiation (the "Plan").

296 BJL81 (Bankr. D. NIL 2003) ..................... 12 11 it With non-duplicative claims asserted in the amount of approximately Sl.7 billion dollars in bT. Law Offi s *ofeil Vincent Wakev. Sodonm Institute Onre Sed.nstitute) 12 220 BL 74 (9hCir.B.AP. 1998) ..................... II 12 Class 6 under the Plan, CadPX and the approximately 70 participants in CaIPX's erectricity markets

-J 13 J 13 (the "Participants) who were net sellers represented one of the most significarn creditor 0 0 -

14 STATUME X 14 constituencies in PG&E's bankrptcy case. CdPX operated its markets pursuant to two FRRC-U) is II U.S.C.§327 .......................... 10 Ur) is approved tasiffs (the 4Tariffh . Pursuant to the Taliffh and the Participation Agreements exected 16 11 U.S.C. 330 .......................... Id 10,11 >. 16 by all buyers and sellers in Its markets, including PG&E, CaIPX was responsible fbr collecting the 17 II U.S.C. 503 .......................... 10,11,22 C 17 amounts owed by the net buyers In CalPX's markets, PO&E and the two other investor owned utility Is 11 U.S.Ca 1103 .......................... 10,11 companies that participated in the markets, Southern California Edison (SCE") and San Diego Gis 19 BsnkrautActofl89 i§f242 nd243 .......................... II 19 & Electric Company ("SDG&E"), and paying the apprpriate amounts due to the Participants thit 20 20 were net sellers in the markets.

21 21 In fintherance of its duties under the Tariffs and Participation Agreements, CaIPX filed 22 22 ClaimnNo. 7411 on August 31, 2001 in theamount ofS1,729,688,561.23 (the 'Otiginal Prepetilion 23 23 Claim') and Claim No. 13282, amnending the Original Claim, on June 6,2002 inthe amount of 24 24 S1,778,979,543.96 (the "Amended Prepetition Claim" and, collectively with the Original Prepetition 25 25

. II 26 26 CaIPX operated its markets pursuant to the "California Power Exchange Corporation FERC Electric Service Tawiff No. 2". CalPX Trading Services ("CrS"), an unincorporated division 27 27 of CalPX, operated a market for the purchase and sale of "block forward contract" for the delivery of energy in future months, which was govertned by the "CaIPX Trading Services 28 28 Rate Schedule FERC No. 1". California Power xchange Corp. 87 FERC ¶ 61,203 (1999).

4 of Subarsatral Coumbution Claim DI.W.WtD Call`X's Requeat tbrhy--- or Sebtania Cmstribu"a Clam rnrs.wio 2:11M.VPI) CalPXa Request CSIM's for P.ymmt Ralued rca Peynod ofSubstantial CmtnWon Claim

Claim, the "Prepetition Claim") against PG&B claiming. among other things amounts owed to Glusker, Fields, Claman, Machtinger & Kinsella LLP ("CGreenbergl, and Kaye Scholer repreeti 2 CaIPX, but ultimately due to the Participants, by PG&E based on its activities in CaIPX's markets. at various times, (i) the Official Committee of Participant Creditors of CaIPX (the "Paticipants 3 Notwithstanding CaIPX's right and duty to collect amounts owed by PG&E based on its Committee") acting its own right or on behalf ofCaIPX or (ii) Reorganized CaIPX during the period 4 activities in CaiPX's markets, many Participants filed their own direct claims against PG&E - from April 6,2001 through June 30,2004. CalPX believes that the work of Greenberg and Kaye 5 collectively duplicating a significant portion of the Prepetition Claim. This precaution on the part of Scholar described herein made a substantial contribution to PG&B's successful reorganization, 6 the Participants, encouraged in part by a notice firom the ISO informing the Participants that ISO henefitted numerous parties in PG&E's case besides CaIPX, and was not duplicative of services 7 would not be asserting claims on their behalf against PG&E', created a number of difficult issues in rendered by PG&E's attorneys or the attorneys for PG&E's Official Comnmittee of Unsecured 8 the case including: () questions regarding the proper party(ies) to vote the claims, (ii) how to Creditors (the -PG&E Committee")

9 accurately quantify the claims in Class 6 given the extensive duplication and the fact that the direct 10 claims erroneously included unspecified amounts owed by SCB, ,(iii) how to structure the disputed 11 claims reserve for Class 6 claimants, (iv) how to handle settlements of Class 6 claims vis-a-vis 3 12 FERC and the PG&E and CaIPX bankruptcy estates, and (v) procedures for non-consensual CaIPX is nonprofit public benefit corporation created by the State of California as an integral resolution of Class 6 claims. The case was further complicated by PG&E's efforts to attack the ILl component of California's restructuring of the electricity industry. Pursuant to California Asqembly J 13 -J 0 0

° 14 direct clairns by naming CaIPX - the convenient one-stop source of information - in several Bill ("AB") 1890, signed into law on September 23, 1996, and codified in various sections of the 0

Of 15 requests for production of sensitive documents under Federal Rule of Bankruptcy Procedure California Public Utilities Code, CalPX was established to conduct markets for the wholesale ILd

)- 16 ("FRBP') 2004 regarding the trading activities of the Participants. purchase and aale of electricity.

\ 17 As described in more detail below, CaIPX seeks payment of $516,911.51, its Substantial On March 31, 1998, CaIPX began operations to provide and maintain an efficient, 4

18 Contribution Claim. representing approximately 1,279 hours0.00323 days <br />0.0775 hours <br />4.613095e-4 weeks <br />1.061595e-4 months <br /> of service' performed by Greenberg. competitive auction for the trading of wholesale electricity within the State of California. CalPX 19 operated and administered two markets for the purchase and sale of wholesale electricity for delivery 20 2 See ExAilbIt "G" to the concurrently filed Appendix ofEhibits in Support ofthe California on the same day or the following day, in which approximately 70 entities participaed, Including Power Exchange Corporation's Applicationfor Payment of Professional Compensation and 21 Reimbursewent ofExpsmes under 11 US.C ,f 503(b)(3) and (4) (Appendix"). PG&E. CalPX also acted as a scheduling coordinator for some of the Participants, including PG&E1 l 22 inthe real-time market administered by the California Independent System Operator Cosporation 3 CaIPX's "day ahead" and "day ofr markets were blind pooled markets, with sellers receiving 23 statements hum CalPX showing the amounts they were owed, but not the identity of the (the "ISO"). PG&E participated in the new market structure pursuant to, riter alia, a written purchaser. Since both PG&E and SCE were in default, the statements sellers received - and 24 used as the basis of their direct claims - also included unallocated amounts which SCE owed. 4 (-continued) 25 direction at hearing on June 9, 2004, Ca&PX is also filing a motion for authority to amend the 26 4 On January 21, 2004 CalPX also filed a request for payment of an administrative claim, Prepetition Claim to liquidate the amount of its prepetition and postpetition costs, Including which CalPX amended on May 26,2004 (the "Administrative Claim") in the amount of attorneys fees, chargeable to PG&E which were initially asserted in the Prepetition Claim in 27 $834,854.66, without prejudice to CalPX's right to include amounts incurred after March 31. an unhquidated amount.

2004 or to amend the Prepetition Claim. Concutently herewith, and pursuant to the Court' 28 (continued...) aa Declaration of Michael Schenk attached hereto, 112 and 3.

5 6 nWd0.WrD C&MC&Regato ft Paymm otSubmndal Cmk&Wm CWm D2UM.Wra CM'S Requed for ViYamm afsLdwandol Contnudim Clahn

Participaion Agreement made December 19,1997. PG&E also participated in a third market, for I Ill.

2 the purchase and sale of 'block forward contracts" for the delivery of energy in future montis, 2 THE ROLE OF CALPX AND TME PARTICIPANTS COMMITTEE 3 operated by an imincorporated division of CslPX pursuant to, inter ltia, a written Form Of Block 3 Three law firms have representd CalPX and its estate in connection with PG&E's 4 ForwardMarket Participation Agreement dated July 12, 1999. 4 bankruptcy case: Jeffer, Mangels, Butler & Marmaro LLP ("Neffee), Greenberg, and Kaye Scholer.

S Pursuant to the Tarifib, CJIPX settled and cleared transactions in its markets and also those 5 Jeffer was employed by CaIPX as it bankruptcy counsel in CaIPX's own chapter 11 case 6 99ahsactions in the ISO's real-time market in which it acted as scheduling coordinator. CalPX .6 reb erg represeted the Participants Committee' in the early stages of CaIPX's bankruptcy case 7 rneled all dat regarding the tradingand scheduling activities of the Participants and, in the cut 7 and Kaye Scholer represented the Participants Committee thereafter. After the CadPX Plan became 8 of real-time m t t econciled amots due to and fiom Participants and the ISO.

• S8 effective on AprIl 1, 2003, Kaye Scholar began representing and continues to represent Reorganized 9 CaiPX gnernted staments and invoices speciting the amounts due to nd fiom each Participant 9 CaIPX as special counsel, including In connection with this matter. Due to the relatively small 10 and to the ISO. CdIPX also operated a settlement and clearing system through which it collected and ' 10 amount offees attributable to Jeffer which would be applicable to the Application, CdIPX has 1i paid the unounts due to ind fron the Participants and the ISO. 11 elected not to include any fees incurredbyJefer in tOe Application. See CohenDeeL, 17.

12 Beginning in or about Jamary 2001, PG&E fidled to pay invoices fron CdaPX for trading in 12 Although Jeffer was CaIPX's bankruptcy counsel, pursuant to an Order ofthe CaIPX itl

-J 13 te markets administered by CaIPX and the ISO. PG&E's failnre to pay Ca1PX'e Invoices left a j 13 Bankarptcy Court on entered July 13,2001 (the Utigation Order", the Participants Cormmitteie was deficit ofnearly two billion dollars In CaJPX's settlement clearing account, rendering CdPX unable 0 0 14 3 14 authorized to represent the CalPX bankruptcy estate in connection with certain litigation and claims, 15 to pay other Participants for electricity purchased by PG&E through CalPX~ markets. Participants (1) 15 including the CaIPX estate's claims against PG&E pursuant to the terms of the Litigation Stipulation 16 have sought to recover the unpaid funds thlough claims in CslPX's bnrptcy case, claims in )- 16 between CaIPX and the Participants Committee The Litigation Order provides, "..Cal Pf/ be and Il 17 PG&E's bankruptcy case, and in multiple pir ings in the courts and before FERC. e 17 it Is authorized to pay the fees and costs incurred in the prosecution and defense of the Litigation (by 18 CslPX suspended the operation of its markets on January31, 2001, and filed a voluntary i8 the Participants Committee] fiom the general funds of this [CalPXJ chapter 11 estate, provided, 19 petition under chapter I I of the Bankruptcy Code on March 9, 2001. A month later, on April 6, 19 however, that such payment is without prejudice to (i) the rights, claims and demands of party in 20 2001. PG&E filed its voluntary petition wider chapter II of the Bankruptcy Code. 20 intrest to bring proceedings before this Court or any other court ofcompetentpilmiriedon to seek 21 On November 1,2002, the Bankruptcy Coort for the Central District of California (the 21 recovery of such payments for the benefit of the estate of Cal P/X fium the Participants, .

22 eCaX Bankruptcy Court") entered its order confirming the Qfflcial Committee of Parflpant 22 (emphasis added) Copies of the Litigation Stipulation and Litigation Order are attached as Erhlblta 23 C 'FffthAmAWded Chapter)1 Plan0 Moifid (wd October 1, 2002) (the CalPX 23 'Al and IB," reapectlvely, to the Appendix. The Application is being brought for the benefit of 24 Plan"). Under the terms of the CalPX Plan, the CazPX Plan's Effective Date occured on April 1, 24 CaIPX Se Cohen Decl, I S.

25 2003, when MERC entered its order approving certain CalPX Plan provisions over which it ha 25 Certain of the activities of the Participants Committee, acting on behalf of CalPX pursuant to 26 jurisdifction. See Declaration of Marc S. Cohen (ben DeLW), attached hereto, 1 6. PG&E's Plan 26 27 was c6idirimed prtaunt to an entered by the Court on December 22, 2003 and became effective on 27 ' The Participants Committee was duly appointed by the Office of the United States Trustee for the Central District of California on March 26,2001 for the purpose of representing the 28 April 12,2004. 28 Interests of net sellers In the CaIPX markets.

7 8 2tW19R CaWX'sRqnut for PqtmentoESubtatial Coninbtittn Clim 2313M.1" CaIPX'#Reqt" for Paymedol'Substimlial CantnibWon Claim

the Litigation Stipulation and Litigation Order, are described in detail below. Primarily, these Scholer. whose employment as counsel for the Participants Committee was approved by the CalPX 2 activities were to ensure that (i) PG&E's requests for production of documents by CalmX were 2 Bankruptcy Court The legal fees incurred by Greenberg and Kaye Scholer directly beneficial to the 3 complied with in a manner which protected the confidentiality concems of CaIPX and the 3 PG&E estate during the period of April 6, 2001 through May 31, 2004 are summarized and described 4 Participants, and satisfied PG&E's needs, (ii) adequate provision was made in the PG&E Plan for in Article V, below.

4 5 resolution by FERC of the disputes relating to CaIPX's Tariffs and markets, and for payment by 5 As a result of being employed in the CaPX case, both Greenberg's and Kaye Scholer's fees 6 PG&E of amounts directed by FERC to be distributed to or through CsIPX, and (iii) the proper roles 6 and expenses through March 30, 2003 were thoroughly reviewed and approved by final order of the 7 of CalPX and its Participants under the Tariffs were taken into account in plan voting and other 7 CaIPX Bankruptcy Court after determining that those expenses were reasonable, actual and a matters. an Cohen DecL, 19. 8 necessary in compliance with the standards of 11 U.S.C. §§ 327,330 and 1103. These fees and 9 Throughout the PG&E bankruptcy case, the Participants Committee also finctioned as a l9 expenses were paid out of the CaIPX esate pursuant to several orders of the CaIPX Bankruptcy 7

10 liaison between PG&E and the Participants in resolving issues relating to their claims and the PG&E 10 Court. The fees and expenses of Kaye Scboler from April 1,2003 to May31, 2004 werc billed in 21 Plan. SA Cohen Decl.. 1 10. The vital benefits to PG&E of these cfforts have been gublicl II accordance with the same procedures as those approved by the CaIPX Bankruptcy Court. So Cohen 12 recogiized bvPG&E itselt. S. "Statement of Pacific Gas And Electric Company Regarding the 12 Decl., 1 12. Thus, all of the fees and expenses incurred in substantially contributing to the PG&E Er hd 13 13 Employment of Kaye Scholer LLP and BDO Seidman," filed August 8, 2001 in the CaIPX chapter case were actual, reasonable and necessary. Accordingly, reimbursement of these fees and expenses 0 0 214 11 case (the "PG&E Statement), attached to the Appendix as Exhibit "C:" I 14 by PG&E to CaIPX is entitled to priority treatment pursuant to 11 U.S.C. §§ 503(bX3)(D) and (f215 PG&E has communicaed regularly with Marc Cohen, counsel U 503(b)(4).

(1) 15 bi to the Committee, ... regarding developments in PG&E's case.

>.. 16 The Participants' Committee, through pleadings, court I 16 appearances, and its involvement in negotiations, played a Y 17 major and constructive role in resolving multiple objections to I 17 IV.

PG&E's applications under Federal Bankruptcy Rule 2004 for is production of documents by CaIPX and the California 1S ARGUMENJ Inidependent System Operator.... In addition, the 19 Participants' Commttee worked with PG&E to sponwr a 19 A. A Credltor Making a Substantial Contribution to a Chapter 11 Case is Entitled to an telephonic meeting wdth members of both the Participants' 20 Committee and the Unofficial Commnittee of Energy Sellers to 20 Administrative Expense Claim Pursuant to 11 U.S.C.p8 5031b1(3UpD and 503M 4'l.

discuss information regarding the progress of PG&d's chapter 21 11 case. PG&B and the Participants' Commnittee are discussing 21 Section 503(b) of the Bankruptcy Code lists several fees nd expenses which are entitled to the role that the Participants' Commttec can play in PG&E's 22 development and proposal of a chapter l, plan 22 administrative expense priority. Included in this list under § 503(bX3XD) are "expenses" of 23 The Participants' Committee serves a valuable role in both 23 the CaiPX and PG&E cases by effectively focusing the voices 24 of the market participants, the sheer magnitude of whose claims 24 7 The Bankruptcy Court for the Central District of Califomnia in the CalPX case approved the compels attention by the respective debtors, but whose final fee applications of Greenberg and Kaye Scholer, including fees and expenses incurred in 25 numerosity makes the role of the Participants' Committee 25 connection with the PG&B case sought herein, and ordered CaIPX to pay those expense&

essential in discussing the interests of mrket participants.

26 Accordingly, PG&E supports the current role of the CalPX obeyed those Court orders and paid the fees. The order approving the final 26 Participants' Committee in tese cases.... co~penlsation for Greenberg's fees and expenses entered on June 20,2003, is attached to the 27 27 Appendix as Exhibit "D." The "Order re Third and Final Application of Kaye Scholer LLP The efforts of the Participants Committee were primarily through Greenberg and Kaye for Allowance and Payment of Compensation and Reimbursement of Expeases" entered on 28 28 June 13,2003, is attached to the Appendix as ExhIbit "El S; Cohen Decl., 1 2.

9 I10_

10 Saibdaulial Ceabibuilee Claim Reua r.

of 3i1344.WiO CWX's Requr frwPapnent c(&sbinca butica Clium 233IWID 23W49W1g CaIPXs Requca U41FIXs fr Paymmi Psy atsimatl anfdo im

creditors "maldng a substantial contribution in a case under chapter... 11 of this title." II US.C. "substantial contribution under the 1898 Act was the extent of benefit to the estate and the same test 2 §503(b)(3). CdPX, having filed the Prepetition Claim against PG&E, which remains unpaid, is a 2 applies to claims under comparable section 503(b)(3XD)." hL 3 "creditor" for purposes of 503(bX3)(D). Furthernore, under 11 U.S.C. 5 330 and 1103, those 3 Courts also evaluate the following three main factors when determining whether a claimant 4 fees and expenses incumred for the period April 6, 2001 through Msarch 31, 2003 paid by CadPX to 4 has substantially contributed to a case: (1)whether the services were rendered solely to benefit the S Greenberg and KSw Scholerpunt to their fee applications were expenses of the CalPX estate. 5 creditor or to benefit all the parties to the case- (2) whether the services provided a direct, significant 6 Tlus, upon a showing by CalPX of its having made a substantial contribution to the PG&E case, an 6 and demonstrable benefit to the este; and (3) whether the services were duplicative of services 7 of the amounts detailed herein which were paid from the CalPX estate to Greenberg and Kaye 7 rendered by attotneys for the connmittee, the committee themselves, or the debtor and its attorneys.

8 Scholer for services fron April 6,2001 through March 31, 2003 are entitted to adminisvative 8 In re Pow Wow River CameouL Inc 296 BR. 81 (Bankr. D. N.H. 2003) (considering all 3 9 picorltypursuartto II US.C. 5 503(b)3)(D). 9 factor, in evaluating a creditors administrative claim); In re Conty of Oranm 179 BRL 195 202 at 10 CaIPX may also recover the amounts It has paid to Kaye Scholer for Kaye Scholer's 10 n. 19 (Bankr. CD. Cal. 1995) (citing as dicta the second factor as a requirement for giving 11 repreuentetioioffCaPX in the PG&E case firm April 1,2003 to the pr oReasonable 11 administrative priority to an indenture trustee).

12 compensstion forservicesrendered byan sttorney ... ofan entitywhose expense is allowable under The detailed narrative of the services provided by Greenberg and Kaye Schbler included Er 12 paragraph (3) Is included in the list of expanses entitled to administrative expense priority. Iid ij 13 -J 13 below show that these services (1) provided a direct, significant and demonstrable benefit to the 0

It U.S.C. I 503(bX4). CalPX)a plan of reorganization became effective on April 1, 2003, at which 0 PG&E case; (2) were provided to the benefit of numerous parties involved in the PG&E case, and (3)

I 14 3: 14 U

U1) 15 time the Participants Committee ceased to exist mnd Kaye Scholer assumed certain specific (I) 15 did not duplicate the efforts of PG&E, the PG&E Committee or their respective counseL IUl representation of the Reorganized CaIPX, including for all mattes In the PG&B a se. S Cohen LI

>. 16 16 Y 17 Decl, 16. Tbhuonce CrlPX demonstrates that It substantially contributed to the PG&E case, 17 V.

18 CaIPX will be endtled to the fee and expenses incured for Kaye Scholer'a services in the PO&B 18

SUMMARY

OF COMPENSABLE SElRVICIS 19 ce from April 1.2003 through May 31, 2004 as n administrative expense claim pursuant to II 19 The work of Greenberg and Kaye Scholer which substantially contributed to the PG&E case 20 U.S.C. 503(bX4) regardessof whelterCsPX has my expenses covezed under 11 U.S.C. 5 20 falls into the following seven categories:

21 503(b)(3)(D). S The law Offices of Ndl Vincent Wake v. Sedom histitute (In re Se 21 22 hJsdt b)220 BR. 74,81 (9th Cir. BAP. 1998). 22 23 23 Fecs lncu. ed 1.FRBP 2004 Document Production S60,927.r5 24 B. The Snbitsuttal Cenrtfbatlon TesL 24 Requests to CalPX byPG&E 25 As described in detail below, CalPX substantially contributed to the PG&E case. Substantial 25 2. PG&E Pbn/DS $280,955.31 26 contribution, while not defined in the Baukruptcy Code, originates rom §§ 242 and 243 of the 26 3. Work with the PG&E Subcommittee of $2,509.25 the PG&E Connittee 27 Bankruptcy Act of 189S. See Christian Llfe Center Utination Defense Committee v. Silva (In re 27 4. Opposition to PG&E'a Motion to $24,286.00 28 £Uitn I Jtinter), 821 F.2d 1370, 1373 (9th Cir. 1987.) The applicable test for determining 28 Estimate Class 6 claims 11 12 "LMWn> 'CaPX' Reqa for Pny~wn of Sbtfhaal C0nuUt Chin "13OW-7D Cal]?X's Reqved for Parnest ofSobehmfial ContriMon Claim

5. Voting Procedures for Class 6 claims $26,248.02 1. CaIPX played a major and constructive role In resolving multinle oblectlons to 2 6. Procedures for the Class 6 disputed 543,224.18 PG&E's various apliicatlons under FRBP 2004 for production by CalPX of confidentlal and claims reserve and escrow 3 highly sensitive information conuceruing the Participants,

7. Preparation of the Application S78.761.60 4 Fees - $60,927.15 Task Code - "2004"'

Total $516,91151 5 On April 26,2001, PG&B filed the first of several sweeping requests for the production of 6 document by CaIPX pursuant to FRBP 2004. PG&E later justified its burdensome request by 7 The amounts sought in the Application include only those expenses for service directly arguing tht the reques information wa (a) critical to valuating the claims of the Participants for S related to the PG&E chapter 11 case, and do not include costs incurred in connection with other formulating and developing a plan of reorganization, (b) necessary to determine whether PG&E had 9 proceedings such as those before FERC, the CsiPX bankruptcy case, or in state and federal court a basis to assert setoffs, and (c) potentially going to provide PG&E with affirmative claims against 10 litigation, even though these fees were also directly or indirectly related to PG&U CRIPX, however, the Participants. S page 13 of the "Notice of Motion and Motion forEntry of Order Requiring 11 hereby reserves its rights to seek compensation in connection with other such proceedings pursuant Production ofDocuments by the California Independent System Operator Corporation and California

{ 12 to the Tariffs and federal law. 3; Declaration of Conine J. Rebhun attached hereto ('Rebhun Power Exchange Corporation Pursuant to Federal Bankruptcy Rule 2004" filed on May 31,2 001 Id Li 13 DelC"), 11 2-4. The detailed billing statements for Greenberg and Kaye Scholar are attached to the LI (Docket No. 752, the "May 2001 Request") attached to the Appendix as Exhibit "P." Furthermore,

-J 0 0 I 14 Appendix as Exhibits "1" and "J," respectively. Next to each time entry included in the PG&E sought information fiom CalPX in part because it believed that the Participants and the ISO Application is the code for the task category into which such entry was assigned in compiling the U)

()5 represented the largest block of PG&E's debt that was expected to be subject to objection or W 16 Application. Biographies of each of the Greenberg and Kaye Scholer professionals and Li litigation. A, Thus, by PG&E's own statements, the Participants Committee's assistance in creating e 17 paraprofessionals whose services comprise the Substantial Contribution Claim are attached to the a framework for obtaining infonnation from CalPX was essential to PG&E's reorganization and Is Appendix as Exhibit "H." substantially contributed to the PGAB case.

19 These services, described in detail below, substantially contributed to the PG&E case by As PG&E recognized in the May 2001 Request, creating a procedure for producing 20 streamlining and efficiently managing PG&E's communication with the over 70 Participants information was complicated by the fact that CatPX was not authorized to disclose the information 21 asserting claims in Class 6 of approximately $1.7 billion, providing a central repository of PG&E requested because of confidentiality provisions in the Tariffs and individual confidentiality 22 information for use by PG&E and other parties in the PG&B case, successfuly negotiating and agreements and that such information might be considered sensitive financial information by some of 23 resolving the demands of the Participants leading to a confirmed plan of reorganization, lessening the the Participants. S the May 2001 Request, p. 4. In fact, these concerns sparked an outpouring of 24 burden on the professionals of PG&E and the PG&E Committee by providing assistance during the demands on CaIPX by individual Participants not to disclose the requested information. &s Cohen 25 reorganization process to the Participants, creating novel solutions to the unique issues raised in 26 PG&E's complex case and expediting a smooth transition through the bankruptcy process.

All task codes refer to the nottions contained in Appendix ExhibIts "I" and "J", the 27 "11 Greenberg and Kaye Scholar billing detail, located next each individual time entry included 28 /1/ in the Application. Time entries without task codes assigned to them are not included in the Application. ag Rebhup Decl., 12.

13 14 liAJ1W.,%- wrx'Kqefor Naynm of Suwm Carsomn aaim 233fa/

Carxs Rqa for namof Submai Colibutn (Um

I-Decl., 1 14. While som Participants chose to file separate objections, most Participants turned to 1 limited opposition to PM&E's March 20,2002 request (Docket No. 5,793) on April 3, 2002. In counsel for the Participants Committee to protect the rights and interests of all of the Paricipants. 1 2 particular, the Participants Committee's limited opposition ensured that the Participants retained the PG&E has publicly ackbowledged that Marc Cohen and counsel for the Participants Committee 3 right to reciprocal information as ordered by the Court in the "Order Directing Production of played major and constructive role In resolving these concerns 9 S the PO&E Statement attached i 4 Additional Docunents to ISO/PX Mairet Participants Pursuant to Bankruptcy Rule 2004 entered to the Appendix as Exhlbit 'CI' 5 on April 25, 2002 (Docket No. 6, 105). Maintaining this reciprocity again spared the Court and After extensive negotiations aid meet and confer sessions, te Participants Committee's 6 PG&E from dealing with and avoided multiple requests made by individual Participants which cormsel helped create a procedure which resulted in the production of infonustion to PG&E while 7 wouId have needlessly proliferated proceedings and overburdened the parties and the Court.

also protecting the confidentil and proprietary nare of the inibrnston. 3 Cohen Decl 11 5. 8 In addition to filing pleadings and negotiating with PG&E, counsel for the Participants This procedur including severely restricting to disclosed infomation to Po&B personnel 9 Cormnittee also spent a significant number of hours over the course of two years assisting and establishing mechaniumn to protec confidential infinnation, was approved by the "Order 10 Participants in complying with the Court's FRBP 2004 orders. Se Cohen Decl., 1 7. This Directing Production of Documents to Pacific Oss and Electric CompanyPursuant to Federal 11 assistance Included adtiing Participants with respect to the production and confidentiaity of BankrptcyRule2004 AndProtetive OrderRespectng ConfidentlitofDocme" entered on 12 information, reviewing produced materials, centrally organizing responses to the multiple document t~i hly 11, 2001 (Docket No. 1,446). Additionally, the Participants Committee successfully sought the tal 13 requests, and verfying compliance with the confidentiality and non-disclosure procedures. IL In 0 0 M right of the Participants to engage in reciprocal discovery fait PG&E which was approved in the t 14 fact, counsel for the Participants Committee acted as the focal point for compliance issues related to (I

(I) "OrderDirecting Production of Documents to ISO/PX Market Participants Pursuant to Federal C) 15 PG&E'sFRBP 2004 requests, thereby esring the efficient sharing of infornation, preving III Bankruptcy Rule 2004 and Protective Order Respecting Confidentiality of Documents entered on resources of the PG&E estate and helping the overall administration of the PG&E case. aL Through Iuly 11, 2001 (Docket No. 1,44) as supplemented by the VOrderre Disclosure of Documents by 17 these efforts and the reciprocal sharing of bnformation, the Participants Committee made a significant Mwakt Participants to Key Personnel entered on Sqetember 21 2001 (Docket No. 2.249). This and substantial contribution to the PG&E case which was not duplicated by PO&Z the PG&E reciprocity alone saved the PG&B eshte thousands of dollars and numerous hours (not to mention 19 Conmittee, or their respective counsel the Court's time) in processing Individual Participates FIsP 2004 requests, undoubtedly making a 20 substantial contribution to the PG&E case. 21 2. Tlrmenh otCdnRIndneuLatiug PG&E's Plan avid Disclogire Statemnent.

PG&E filed additional requests for the productionof doduents fiom CdIPX on October 11, 22 ee dsd r thMe Portlienanh Committee substantIally contributed to the i&E ese.

2001 and March 20,2002. The Participants Committee took an active role in ensuing that the 23 Fees - S280,5.31 Task Code - "Plan or "DS" Participants were protected during compliance with these additional requests, including filing a 24 Kays Scholer's and the Reorganized CaIPX's significant efforts facilitated the approval of 25 PG&E's disclosure statement and gained broad creditor support for the PG&E Plan, thereby It should be noted that CatlPX by acting to protect the Participants, took the opposite approach as the ISO. he ISO circulated a notice disclaiming responsibility for protecting the 26 substantially contributing to the PGI&E case Work under this category includes a significant number interests of the Participants, causing the inefficient response ofeach Participant nrecessaily 27 of hours spent on conference calls, in negotiation sessions, analysis of pleadings, legal and market fending for itselE The ISO's 'nportant Notice re Bankruptcy Claims BarDate" is attached to the Appendix as Exhbit "G.

• SmCohen Decl., 114. 28 research, expert consultation, participation at hearings and extensive meetings.

15 16 3313.WnD CITX's Req-Aft PIYN-d0fSuWWAal ConInUtIon aefrn rn3. WFD 'CPIP)Vs Pepid for Pernud of Subft#W ContnWion Clsim

In addition, counsel for the Participants Committee and the Reorganized CalPX filed the more meaningful and complete disclosure and the proposed plan became feasible and thus, more following important pleadings: likely to be confirmed.

2 (i) Response of Participants Committee of CalPX to Disclosure In addition to improving the quality of disclosure and feasibility of the plan, the work d9ne by Statement for Plan of Reorganation for PG&E and PG&E 3 Corporation filed on November 27, 2001 (Docket No. 3,487); the Participants Committee's counsel and the Reorganized CalPX under this category culminated in 4

(ii) Response of Participants Committee of CalPX to the Second Amended the 'Stipulation Resolving Objections of Class 6 Objectors to Plan of Reorganization Under Chapter Disclosure Statement for Second Amended Plan of Reorganization for PGI&E 5 and PG&E Corporation filed on March 19,2002 (Docket No. 5,280); I I of the Bankruptcy Code for Pacific Gas & Electric Company Proposed by Pacific Gas and 12 6

7 (iii) Response ofParticipants Coninittee of CslPX to the Electric Company, PG&E Comporation and the Official Committee of Unsecured Creditors Dated Disclosure Statement for the CPUC's Plan of Reorganiation for 7 8 PG&E filed on May 3.2002 (Docket No. 6,307); July 31. 2003" filed on November 13, 2003 (Docket No. 14,076, the "Class 6 Stipulation). The 8

9 (iv) Participants Committee's Joinder to (l) Objection of Powerex Class 6 Stipulation, heavily negotiated and orchestrated by Kaye Scholer, embodied a settlement Corp. to Plan of Reorganization Proposed by PG&E and PG&E 9 10 Corporation, and (2) Objection of Avista Energy, Inc. to PG&E Plan of between the more than 70 Participants and PG&E and resolved numerous objections to the PG&E Reorganization filed on July 17,2002 (Docket No. 8,928); 10 11 Plan through PG&E's agreement to fund the disputed claim escrow with $1.6 billion. This (v) Participants Committee's Joinder to Objection of Powcrex 11 12 Corp. to Plan of Reorganization Proposed by the CPUC filed on July settlement helped PG&E obtain broad creditor support of its plan, leading to the ultimate 17, 2002 (Docket No. 8.929); 12 j 13 Wi confirmation of the PG&E Plan and undoubtedly making a substantial contribution to the PG&B (vi) Stipulation to Modify Plan Proposed by the CPUC Regarding -J 13 I 14 Treatment of Class 6 Claims filed on August 2,2002 (Docket No. 0 case.

9,918); x 14 (fl15 (vii) Joinder of the Reorganized CalPX to Objection of Powerex 25

> 16 Corp. to Disclosure Statement for Plan ofReorganization Proposed by ILl 3. Kaye Scholer's work with a sUpclal subcommittee of the PG&E Comnitttee PG&E, PG&B Corporation, and the PG&E Committee filed on July 16 17 23, 2003 (Docket No. 13,221); and substantly contributed to the PG&E case by resolving issues with proposed versions of the 27 18 (viii) Reorganized CaJPX's Joinder to Objections of Powerex P!G&E Plan.

Corp., Reliant Energy Services, hic., and Dynegy Power Marketing, 19 inc. to Plan of Reornation for PG&B dated July 31, 2003 filed on Fees - S2,509.25 Task Code - "Sub" September 2, 2003 (Docket No. 13,547).

19 20 As part of the Participants Committee's efforts to assist PG&E in drafting a consensual plan, See Cohen Decl., 119. 20 21 the Participants Committee formed a special PG&E subcommittee (the "CalPX Subcomminttee to These pleadings, among other things: (a) challenged the lack of any explanation of how 22 21 help address Participant concerns. So Cohen Decl., 1 22. On numerous occasions, Kaye Scholar unsuccessfully disputed claims would be paid; (b) questioned how funds would be reserved for the 23 met with members of the PG&E Subcommittee of the PG&E Committee to develop and alyz Class 6 claims; (c) called for a disputed claims reserve or escrow account to hold the Class 6 funds; 23 18 24 24 these issues of concern via-a-vis PG&E's plan of reorganization. dLSubsequently, Kayo Scholer (d) objected to estimating the Class 6 claims for feasibility purposes at hundreds of millions of 25 and members of the CalPX Subcommittee signed confidentiality agreements with PG&E, obtained dollar lower than actually anticipated; (e) demanded specificity with respect to the timing of 25 26 confidential infrmation from PG&E, and met with PG&E to provide input on PG&E's development payment to Class 6 creditors; and (f) challenged the improper characterization Class 6 claims as 26 27 of its plan. AIdThese efforts undoubtedly made a substantial contribution to the PG& ea se because unimpaired. As a result of these challenges and demands, PG&E's disclosure statement included 27 28 they led to the Class 6 Stipulation and the eventual confirmation of PG&E's plan.

28 17 Is 41.M7D woos CaIPX's Requ-e for PiMf aoubsdl Camubfim Cam 2134.ME Wcsr Reqwg Ibr, arewtSuati Cwnubm ray

I'.

4. CAiPM. through the Partlcioants Committee. sbstantally contributed to the 5. By assisting PG&E In the creation of Voting procedures to deal with the Clas 6 PG&E case by ehalnein* PG&E's motion to estimate Partiftnt cshm. 2 claims. CslPX. through the Participants Committee. snbstantisllv contributed tQ the fG&E Fees -S24,26."0P Task Code - "Eat" 3 As pa of PG&E's efforh to avoid adequately funding adisputed clains resenre for Class 6 4 Fees - S26,248.02 Task Code - "Voting" claims (described In the discussion of PG&E's proposed pian and disclosure statement in Article V.2 5 PG&E filed its 'Motion for Temporary Allwance of Claims of Certain Electricity above), PG&B filed a 'Motion for Order Detennining Procedures for Estimating Certain Claims for 6 Generstors and Disallowance of Claims of Califmhia Power Exchange hor Plan Voting Procedurcs" Pian Feasibility Purposes" on Mach 1,2002 (Docket No. 5,008, the "Estimation Motion). The 7 on May 13, 2002 (Docket No. 6444), seeking Court approval of a voting procedure for the Class 6 Estimation Motion requested, mog other things, the Court to allow PGJ&E to estimate Class 6 8 claims. On Jnme 3,2002, the Participants Committee filed its Memorandum of Points and claims at S1.1 billion instead ofSl.7 billion (the rmount of theCalPX Prepetition Claim). In an 9 Authorities of Official Cooumnittee ofParticipant Creditors of the California Power Exchange effort to ensure ffir voting on the PG&E Plan the Participants Committee ied its 'Opposition of 10 Corporation in Support of Detor's Motion for Temporary Allowance ofClaims of Certain Official Committee of Participant Creditors ofCalifboia Power Exchange Corporation to PO&E's 11 Electhicity Generators and Disallowance of Claims of California Power Exchange forPlan Voting Motion for Order Determining Procedures for Estimating Certain Claims for Plan Feasibility 12 Purposes" (Docket No. 6955) explaining the importance ofthis voting proe. The Court Ir Id 13

-J Purposes" on March 22,2002 (Docket No. 5434). he Participants Committee objected to the -Y approved the proposed voting scheme on June 17, 2002 (Docket No. 7332).

0 Estimation Motion became, among other things: (a)the CsiPX Prepetition Claim was neither 0 Although both the Participants Committee and PG&E worked to support the same goal, ie.

I 14 Q 1)

W contingent nor unliquidated, (h) PG&E's potential refund was not susceptible to estimation, and (c) (I) 15 approval of the proposed voting procedures, their vWork was not duplicative. The Participants (n hi estimation was not warranted to avoid delay. Furthamore, the Participants Committee's opposition 16 Conmmittee's work: (a)convinced CalPX not to oppose the voting procedures, (b) lessened the Ne highlighted P&'s.ilgoal behind the Estimation Motion - to unfyirly lower the amount and thus, 4: 17 burden on PG&E and its counsel by not having to counter Participant and CdIPX objections, (c) was inadequately fomd, the disputed claims reserve. 18 necessary to ensure Participant support, and (d) facilitated the Courts appoval of the proposed Severl parties, inchlding CaTpXm, fiedjoinden to tbe Pwticipants Committee's pposition 19 voting scheme. Te Participants Committee's work also substantially contributed to the PG&E case which ultimately defeated PO&E's effoits to estimate the Clas 6 claim d der-fund e aCla 6 20 because it helped create and obtain approval of a fhir and equitable voting sheme for Class 6 disputed claim reserve. Negotiations then ensued, which eventually ensured adequate funding of 21 claimants.

the disputed claims reserve and the creation of a truly feasible plan thereby making a substantial 22 contribution to the PG&E cae. 23 6. Throngh Its connseL the Reorsaled CaIWX made a substantial contrlbntion to

'11 i4 the PG&E cese by assistIng wIth the creation of the Class 6 escrow account 111 25 Fees - 343,224.18 Task Code = "Escrow" 111 26 The Reorganized CdIPX successfilly negotiated the terns of an escrow agreement for a Sl1.

.111 27 billion escrow account (the "Escrw Agreement") with PG&E for the Class 6 claimants. During 111 28 these negotiations, counsel for the Reorganized CalPX researched issues of general concem to all of 20

" 0mCoIP 0t Xs fteq uesfor P m mut of Sub siantki C enrdbudoaasiM r n e w ut 23130"WPD -- a P ' Request Call'Xs e u s fbis Parmm s r u a offtbffsl fS bt mm CwWWm a n b ie Clahn

the Class 6 claimants and helped assure the Class 6 claimants that their interests were protected. VI.

2 Kayo Scholer's research and participation in negotiating the Escrow Agreement: (a) resulted in CONCLU2SIO 2

3 numerous changes to the Escrow Agreement, (b) ensded that the Escrow Agreement was duly Based on the foregoing, CaIPX respectfully requests allowance of the Substantial 3

4 authorized and enforceable, and (c) prevented individual Class 6 claimans from objecting to the 4 Contribution Claim in tho amount of $516,911.51 as an administrative expense claim pursuant to 5 Escrow Agreement. Kaye Scholer also appeared at the hearing on the Escrow Agreement on behalf 5 *§503(bX3) and (4). CalPX reserves Its right to amend the Substantial Contribution Claim without 611 of the Class 6 claimts, leading to the efficient and timely approval of the Escrow Agreement by the 6 prejudice to any rights of CaIPX under the Tariffs or other fedral or state law.

7 PG&E bankruptcy court on March 5,2004. So Cohen Decl., 127. Accordingly, the Reorganized 7 Dated: July a 2004 S C&IPX, through its counsel, made a significant and substantial contribution to the PG&E case which S iCAYE SCHOLER LIP Marc S. Cohen 9 was not duplicated by PG&E, the PG&E Committee, or their respective counsel. 9 Ashleigh A. Danker CorrineJIRabhun X 10 10 11 7. The Reorganized CaIPX Is entitled to reimbursement rime spent prenarlug 11 12 the Substantial ulalon Clalqa 12 Marc S. Cohen Attorneys for Creditor, the 23 Fees - 578,761,60 Task Code - "503(b)(3)"

I 0

-J 13 Reorganized California Power Exchange Corporation U) 14 In the Ninth Circuit, a claimant is entitled to compensation for services related to preparing 0 14 X.

(n 15 applications for compensation. e In re N oM In. 764 F.2d 655 (9th Cir. 1985) 0 LO (n)15 16 (attorney allowed compensation for preparing a fee application because such preparation is an actual 'aI 16 1

17 and necessary expense of the estate). Accordingly, CaIPX requests reimbursement of its attorneys 4: 17 IS fees in preparing the Application. 18 19 19 20 20 21 i// 21 22 A// 22 23 /1/ 23 24 24 25 25 26 26 27 i/I 27 28 /1/ 28 21 22 E3.-.m  %;auL-9K qued for tahncy of Subsmuia Cnutbon Clohn nu..wr COIPX' Reques for Pyanmt of Subd-sWi Comakmom Clam

DECLARATION OF MARC S. COREN I would not be asserting claims on their behalf against PG&E"', created a number of dificult issues in 2 2 the case including7 (i) questions regarding the proper party(ies) to vote the claims, (iI) how to 3 1.Marc S. Cohen, declae: 3 accurately quantify the claims in Class 6 given the extensive duplication and the fact that the direct 4 1. 1em a member of Kaye ScholerU uP(Kay Scholea. Prior to joiningKaye Scholer 4 claims erroneously included unspecifled amounts owed by SCE" , (iii) how to structure the disputed S on July 9, 2001.1 wasi member of Greenberg Glusker, Fields, Cleran, Machtinger & Kinsella LLP 5 claims reserve for Class 6 claimants, (iv) how to handle settlements of Class 6 claims vis-a-vis 6 ("Geenbergo. I am the barniptcy attorny primarily responsible for the representation of the 6 FERC and tie PG&E and CsIPX bankruptcy estates, and (v) procedures for non-consensual 7 Reorganized Califormia Power Exchange Corporation (the "Reorganized Debto or "CalPX") with 7 resolution of Class 6 claims. Ihe case was further complicated by PG&E's efforts to attack the 8 respect to certain matters, including this matter. Prior to the Effective Date ofCaIPX's Plan on April S direct claims by naming CaPX - the convenient one-stop source of information - in several 9 1,2003,1 was bankruptcy counsel to the Official Committee of Participant Creditors (the 9 requests 1br production of sensitive documents underFderal Re of Bankruptcy Procedue 10 Participants Committee" both during my tenere at Greenberg and at Kaye Scholer. I supervised 10 ("FRBP) 2004 regarding the trading activities of the Participant 11 the other bankruptcy lawyers at Greenberg and Kaye Scholer working on these matters. I have i11 4. As described in mor detil below, CalPX seeks payment of SS1491 1.5, its 12 personal knowledge of the fbts set forth herein end, if called as a witness, could and would testify 12 Substantial Contribution Clalm,'2 representing approximately 1,279 hours0.00323 days <br />0.0775 hours <br />4.613095e-4 weeks <br />1.061595e-4 months <br /> of service perfirmed by 13 competently thero. Capitalized tenns not otherwise defined herein have the same meanings -LI 13 Greenberg and Kaye Scholer reprsenting, at various times, (i) the Participants Committee acting its 0 0 14 ascrbed to them in the pleading to which this declation is attached 14 own right or on behalf of CalPX or (ii) Reorganized CalPX during the period firm April 6,2001 X

ci) IS 2. In fAtheranc of its duties under the Tariffs and Participation Agreements. CadPX U) 15 through June 30,2004. CalPX believes that the work of Greenberg and Kayo Scholer described

11. (IL 16 filed Claim No. 7411 on August 31,2001 in the mount of S1,729,688,561.23 (the "Original 16 herein made a substantial contribution to PG&E's successful reorganization, benefitted numerous hi 17 Prepedtion Claim") and Claim No. 132S2, amending the Original Cla , on June 6,2002 in the 17 Is amount ofSl,778,979,543.96 (the "Amended Prepetition Claism and, collectively with the Original is SeeExhibit "G" to the concurrently filed AppendirofErhibits in STppori of the Calfornia 19 Prepetition Claim, the "Prepetition Claim") against PG&E clahnmin smong other things, amounts 19 Poe Exchange Copron's AppliationforPayment of ProfessionalCompention and Reibursment ofExpense under II US.C ff 503(b)(3) and (4) (-Appendix-).

20 owed to CslPX, but ultimately due to the Participants, by PO&E based on its activities in CalPX's 20 CalPXs 'day shea and "day of' markets were blind pooled markets, with sellers receiving 21 maret 21 statements from CdPX showing the amounts they were owed, but not the identity of the

3. Notwithstanding CaIPX's right and duty to collect amounts owed by PG&B based on purchaser. Since both PG&E and SC wvnre in default, the statements sellers received - and 22 22 used as the basis of their direct claims - also Included unallocated amounts which SCE 23 its activities in CadPX's markets, many Participants filed their own direct claims against PG&E - 23 owed.

24 collectivly duplicating a significant portion of the Prepetition Clim. This precaution on the part of 24 ' On January 21, 2004 CaIPX also filed a request for payment of an administrative claim,

• hich CalPX amended on May 26, 2004 (the "Administrative Claim") in the amount of 25 the Paricipats, encouaged in pat by a notice from the ISO Infonming the Prticipants thatISO 25 S834,854.66, without prejudice to CalPX's right to include amounts incurred after March 31, 26 2004 or to amend the Prepedtlon Claim. Concurrentlyherwit, and pu nt to the Cout' 26 direction at hearing on June 9, 2004, CalPX is also filing a motion for authority to amend the 27 27 Prepetition Claim to liquidate the mount ofits prepetition and postpetition costs, including attorneys fees, chargeable to PG&E which were initially asserted in the Prepettion Claim in 28 2S anunliquidated amount 23 24 rnuaiWwmo catt'X'a Requm roftramds of Sualisud .1conbation Calm fl f t4w P CalPX s ReqUWsfor PsJmeslor Vbsturdal Contnbutimu CaIMIT

I parties in PG&E's case besides CalPX,. and was not duplicative of services rendered by PG&E's I Bankruptcy Court on entered July 13, 2001 (the "Litigation Order"), the Participants Commnittee was 2 attorneys or the attorneys for PG&E's Official Committee of Unsecured Creditors (the "PG&E authorized to represent the CalPX bankruptcy estate in connection with certain litigation and claimrs, 3 Committee"). including the CalPX estate's claims against PG&E pursuant to the terns of the Litigation Stipulation 4 5. CadPX suspended the operation of its markets on January 31, 2001, and filed a between CalPX and the Participants Committee. The Litigation Order provids, "... Cal P/X be and 5 voluntary petition under chapter II of the Bankruptcy Code on March 9, 2001. A month later, on it is authorized to pay the fees and costs incurred in the prosecution and defense of the Litigation [by 6 April 6. 2001, PG&E filed its voluntary petition under chapter II of the Bankruptcy Code. the Participants Committee] from the general funds of this [CalPXI chapter II estate, provided, 7 6. On November 1, 2002, the Bankruptcy Court for the Central District of California however, that such payment is without prejudice to (i) the rights, claims and demands of a party in 8 (the "CalPX Bankruptcy Court') entered its order confirming the Official Committee of Participant interest to bring proceedings before this Court orany othercourt ofcompelent jursdidionto seek 9 Creditors'Fipfh Ameided Chapter II Plan as Modyfled (Revised October 1, 2002) (the "CalPX recovery of such payments for the benefit of the estate of Cal P/X from the Participants .....

10 Plan'). Under the terms of the CalPX Plan, the CalPX Plan's Effective Date occurred on April 1, (emphasis added) Copies ofthe Litigation Stipulation and Litigatiotr Order are attached as Exhibits 1I 2003, when PERC entered its order approving certain CalPX Plan provisions over wbich it has "A" and "B," respectively, to the Appendix. The Application is being brought for the benefit of 3 12 jurisdiction. At that time, the Participants Comnittee ceased to exist and Kaye Scholer assumed CalPX.

W 13 certain specific representation of the Reorganized CalPX, including for all matters in the PG&E case. -J 9. Certain of the activities of the Participants Committee, acting on behalf of CalPX 0 0 I 14 PG&E's Plan was confirmed pursuant to an entered by the Court on December 22,2003 and became pursuant to the Litigation Stipulation and Litigation Order, are described in detail below. Primarily, x

U) 15 effective on April 12, 2004. 0I these activities were to ensure that (i) PG&B's requests for production of doctuments by CaIPX were hi

> 16 7. Three law firms have represented CalPX and its estate in connection with PG&B's complied with in a manner which protected the confidentiality concerns of CaUPX and the 4d 4 17 bankruptcy case: Jeffer, Mangels, Butler & Marmaro LLP ("Jeffee"), Greenberg. and Kaye Scholar. Participants, and satisfied PG&E's needs, (ii) adequate provision was made in the PG&B Plan for 18 Jeffer was employed by CalPX as its bankruptcy counsel in CaIPX's own chapter 11 case. resolution by FERC of the disputes relating to CalPX's Tariffs and markets, and for payment by 19 Greenberg represented the Participants Committee' 3 in the early stages of CadPX's bankruptcy case PG&E of amounts directed by FERC to be distributed to or through CalPX and (iii) the proper roles 20 and Kaye Scholer represented the Participants Committee thereafter. After the CalPX Plan became of CalPX and its Participants under the Tariffs were taken into account in plan voting and other 21 effective on April 1, 2003, Kaye Scholer began representing and continues to represent Reorganized matters.

22 CalPX as special counsel, including in connection with this matter. Due to the relatively small 10. Throughout the PG&E bankruptcy case, the Participants Committee also fiuctioned 23 amount of fees attributable to Jeffer which would be applicable to the Application, CadPX has as a hiaison between PG&E and the Participants in resolving issues relating to their claims and the 24 elected not to include any fees incurred by Jeffer in the Application. PG&E Plan. The vital benefits to PG&E of these efforts have been publicly rceized bv G&E 25 8. Although Jeffer was CaIPX's bankruptcy counsel, pursuant to an Order of the CalPX ilrdfd B&, "Statement of Pacific Gas And Electric Company Regarding the Employment of Kaye 26 Scholer LLP and BDO Seidman," filed August 8, 2001 in the CalPX chapter II case (the "PG&B 27 '3 The Participants Committee was duly appointed by the Office of the United States Trustee for Statement"), attached to the Appendix as ExhlbIt C:"

the Central District of California on March 26, 2001 for the purpose of representing the 28 interests of net sellers in the CalPX markets. PG&E has communicated regularly with Mar Cohen, counsel 25 26 _

I~qust f Psmen ofSubsazami csrubuton lai taIPXs Rqued nlr.5w1o 23136WPD -CAIMS fiw Paymwt ol'Subdands! Comibution Clafin 233WW.WMD CaD'X's RequeN for Psyrnmt of Substantial C WntutnCaM

to the Committee, ... regarding developments in PG&E's case. were billed inaccordance with the same procedures as those approved by the CaMX Bankuptcy The Participants' Committee, through pleadings, court appearances, and its involvement in negotiations, played a 2 Court Thus, all of the fees and expenses incutred in substantially contributing to the PG&E case major and constructive role in resolving multiple objections to PG&E's applications under Federal Bankruptcy Rule 2004 for 3 were actua, reasonable and necesssry. Accordingly, reimbursement of these fees and expenses by on of docments by CsIPX and the California bideperdent SystemuOpaaltor .... In addition, the 4 PG&E to CdPX is entitled to priority treatment pursuant to II U.S.C. §§ 503(bX3)(D) and Particpants' Comnitbe worked with PGO&B to sponsor a telephonic meeting with membars of both the Participgnts' 5 503(bX4).

Committee and the Unoffidda Committee of Energy e lersst dscss infrmation rearin the progress of PG&E'a chapter 6 13. CaIPX ptared a maor and constructive role in resolving multitle obections to 11 cae. PG&e and the Patcpnts' Comnilttee ae discussing the role that the Participnts' Conunittee can play InPO&E'a 7 PO&B's various alicaiona under FRBP 2004 for production by CalPX of confidential and highlt development andproonl of a chapter 11plan 8 sensitive information cencernine the Patlicignnl.

The ParTcipsuts' Comnnittee serves a valuable role inboth ffire CaIPX and PG&EB cases by efihotively focusng the voices 9 Fees - S60,927.15 Task Code - 92004" of the market pariiats, the sheer mag nitude of wvhose claims compels attntion by the respective dcbtors, but whose 10 On April 26,2001, PG&E filed the first of several sweeping requests fbr the production of munerosity makes te rtoe efbte Participants' Committee essential in discussing the interet of market partiipants. 11 documents by CadPX pursuant to FROP 2004. PGt&E laterjustified its burdensome requests by Accordingly. PG&B suports the current role of the

-Participants' Conmdittee in these cae.... i 12 arguing that the requested information was: (a) critical to evaluating th claims of the Participants for IX Li

-j 11. Tbe effots of the Pstlclptnts Commnittee were primaily through Greenberg and IJ 13 formulating and developing a plan of reorganization, (b) necessary to determine whether PG&E had 0 0 Raye Scholer, whose employment ascounsel for the Participants Cormuiffee was approved by tbe I 14 a basis to assert setoffs, and (c) potentially going to provide PG&E with affirmative claims against 0

CalPX Banrgtc Court The legal fees Inure by Greenberg and Kayo Scholbr direty beneficial O 15 the Participants. Seepage 13 of the 'Notice of Motion and Motion for Entry of Order Reqnring hii to the PG&E estate during the period of Apnil 6, 200t through May 31, 2004 are summaized and II 16 Production of Documents by the Califinmia Independent System Operator Corporation and Calfia the described below. v 17 Power Exchange Corporationursunt to Pederd Bankruptcy Rule 2004" Sled on May 31,2001

12. As a result oftbeing mpboyed in the CaIPXC case both Greenberg's and Kayo 18 (Docket No. 752, te IMay 2001 Requesr) attached to the Appendix as Exhibit 6F." Furthernore, Scholar's fees and expenses through March 30, 2003 wnre thnoroghly reviewed and approved byr 19 PO&E sought informatioinfomn CaIPX in pwt because it believed that theParticipahts nd the ISO fmsal yn5dr of the CadPX Bankruptcy Coumt sl~er determining that those expenses were reasonable, 20 represented the largest block ofPGt&E's debt that was expected to be subject to objection or actual and neceDssay in compliance with the standards oft11 U.S.C. §§327, 330 and 1103. Thaes 21 liigation.

fees and expenses were paid out of the CaIPX estate puruat to seea orders of the CaIPX 22 14. As PG&E recognized in the May 2001 Request, creating a procedure for producing 4

BankruptcyCourt. The fees andexpenses oftKayo Scholar from April 1, 2003 to May 31, 2004 23 information was complicated by the fact that CaIPX was not anthorizto disclose the infrmation 24 PG&E requested because of confidentiality provisions in the Tariffs and individual confidentialty

" The Bankruptcy Court for the Central District of Callfornia in the CalPX case apoved the 25 final fee applications of Grenerg and Kayo Scholar, including fees and expenses incmumud in 26 connection wvith the PG&kE case sought berei, andt ordered CdIPX to pay those expenses. u (_continued)

CalPX obeyed those Court ordeu and paid the fees. The order aproing the final 27 Appendix as Exhibit 9)." The 'Order re Third and Final Application of Kaye Scholar LIP compestion for Greenberg's fees and expenses entered on June 20,.2003, is attached to the for Allowance and Payment of Compensation and Reimbursement of Expenses" entered on 28 June 13, 2003, is attached to the Appendix as Exhibit "K' 27 28 231%M~.WPD C st X's Rqeg nIN,45.w~o " ft r a m uof sub sa n Wa Claim COW& MutoO f3 5 9 W OC 2SINW.WPID I XaRequan cawrs sq e tofy e r t u s ani t for Krnwersubstswai C or b lo claim contnindion li

agreements and that such information might be considered sensitive financial information by some of October 11, 2001 and March 20,2002. The Participants Committee took an active role in ensuring 1

2 the Participants. S the May 2001 Request, p. 4. In fact, these concerns sparked an outpouring of 2 that the Participants were protected during compliance with these additional requests, including 3 demuands on CalPX by individual Participants not to disclose the requested informatior. While some 3 filing a limited opposition to PG&E's March 20,2002 request (Docket No. 5,793) on April 3,2002.

4 Participants chose to file separate objections, most Participants turned to counsel for the Participants 4 In particular, the Participants Committee's limited opposition ensured that the Participants retained 5 Committee to protect the rights and intests of all of the Participants. PG&E has publicly S the right to reciprocal information as ordered by the Court in the "Order Directing Production of 6 acknowledged that Greenbrg, Kays Scholer, and I played a major and constructive role in resolving Additional Documents to ISO/PX Market Participants Pursuant to Bankruptcy Rule 2004" entered 6

7 these concerns." S. the PG&B Statement attached to the Appendix as Exhibit "C." 7 on April 25,2002 (Docket No. 6,105). In my opinion, matainig this reciprocity agnspared the 8 15. After extensive negotiations and meet and confer sessions, I and other members of my 8 Cout and PG&E from dealing with and avoided multiple requests made by individual Par 9 finn helped create a procedure which resulted in the production of information to PG&E while also 9 which would have needlessly proliferated proceedings and overburdened the parties and the Court.

10 protecting the confidential and proprietary nature of the information. This procedure, including 10 17. In addition to filing pleadings and negotiating with PG&E, I and other Kaye Scholar 11 severely restricting access to disclosed informuation to PG&B pesonnl and establishing mechanisms 11 attomeys acting under my supervision also spent a significant number of hours over tho course of to protect confidential information, was approved by the "Order Directing Production of Documents 12 two years assisting Participants in complying with the Court's FRBP 2004 orders This asdistnce iJ 12 Id 2j13 to Pacific Gas and Electric Company Pursuant to Federal Bankruptcy Rule 2004 and Protective .il 13 included advising Participants with respect to the production and confidentiality of information, 0 0 1: 14 Order Respecting Confidentiality of Documents" entered on July 11. 2001 (Docket No. 1,446). I 14 reviewing produced materials, centrally organizing responses to the multiple document requests, and U) is Additionally, the Participants Committee successffufly sought the right of the Participants to engage 0 (1) 15 verifying compliance with the confidentiality and non-disclosure procedures. In fact, I acted as the in reciprocal discovery from PG&E which was approved in the "Order Directing Production of Id focal point for compliance issues related to PG&B's FRBP 2004 requests, thereby ensuring the

," 16 >- 16 V 17 Documents to ISOIPX Market Participants Pursuant to Federal Bankruptcy Rule 2004 and Protective V 17 efficient sharing of information, preserving resources of the PG&E estate and helping the overall 18 Order Respectirng Confidentialityof Documents" entered on July 11,2001 (Docket No. 1,448), as administration of the PG&E case. Through these efforts and the reciprocal sharing of information, 19 supplemented by the "Order re Disclosure of Documents by Market Participants to Key Personnel" 19 the Participants Committee made a significant and substantial contribution to the PG&B case which t4 20 entered on September21. 2001 (Docket No. 2,249). It is mybelief that this reciprocity alone saved 20 was not duplicated by PG&E, the PG&E Committee, or their respective counseL 21 the PG&E estate thousands of dollars and numerous hours (not to mention the Court's time) in 21 18. Through uleadlugs and negotlatlig PG&E's Plan and Disclosure Statement.

22 processing individual Participant's FRBP 2004 requests undoubtedly making a substantial 22 counselfor the Participants Committee substantilly contributed to the PG&E cse" 23 contribution to the PG&E case. 23 Fees - 5280,95.31 Task Code - 'Plan" or IDS' 24 16. PG&E filed additional requests for the production of documents from CaIPX on 24 Kaye Scholer's and the Reorganized CalPX's significant efforts facilitated the approval of 25 25 PG&B's disclosure statement and gained broad creditor support for the PG&E Plan, thereby is It should be nored that CalPX, by acting to protect the Participants, took the opposite 26 26 substantially contributing to the PG&E case. Work under this category includes a significant number approach as the ISO. The ISO circulated a notice disclaiming responsibility for protecting the 27 interests of the Participants, causing the inefficient response of each Participant necessarily 27 of hours spent on conference calls, in negotiation sessions, analysis ofpleadings, legal and market fending for Itself The ISO's "Important Notice re Bankruptcy Claims Bar Date" is attached 28 to the Appendix as Exibit 'G." 28 research, expert consultation, participation at hearings and extensive meetings.

29 30

, - - ma o -augms -. im atCli 21M4.Wn 30 n31"M/ wo -1 .

-A - neq W-- ray"u W ZuD-cnMuia %AUMORcu 23M10WIS CdPX's Request for Payawat of Subgantul Caetibutioua C1i

1 19. In addition, Kaye Scholar filed the following inmpotant pleadings: likely to be confinoed.

2 (i) Response of Particpants Conunittec ofCatPX to Disclosure 2 21. In addition to improving the quality ofdisclosure and feasibility of the plan, the work Statement for Plan ofReorganization for PG&E and PG&E 3 Corporation filed on November 27, 2001 (Docket No. 3,487); 3 done by Kaye Scholer under this category culminated in the "Stipulation Resolving Objections of 4.

4 (it) Re ponse of Participants Committee of C&IPX to the Second Amended 4 Class 6 Objectors to Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for Pacific Disclosure Statement for Second Amended Plan of Reorganization for PG&E 5 and PG&E Corporation filed on Mach 19,2002 (Docket No. 5,280);

• 5 Gas &Electric Company Proposed by Pacific Gas and Electric Company, PG&E Corporation and 6 (idi) Response of Particpants Committee ofCsIPX to the 6 the Official Committee ofUnsecured Creditors Dated July31. 2003" filed on November 13, 2003 Disclosure Statement for the CPUC's Plan of Reorganization for 7 PG&B filed on May 3, 2002 (Docket No. 6,30Th 7 (Docket No. 14,076, the 'Class 6 Stipulation). The Cla 6 Stipulation, heavily negotiated and 8 (iv) Participants Committee's Joinder to (1) Objection of Powerex 8 orchestrated by myself embodied a settlement between the more than 70 Participants and PG&B and Corp. to Plan ofReoanization Proposed by PG&E and PG&E 9 Corporation, and (2) Objection of Avista Energy, Inc. to PG&E Plan of 9 resolved numerous objections to the PG&E Plan throigh PG&E's agreement to fhud the disputed Reorganization filed on July 17, 2002 (Docket No. 8,928);

10 10 claims escrow with $1.6 billion. This settlement helped PG&E obtain broad creditor support of its (Y)Participants Coumnittee's Joinder to Objection of Powerex 11 Corp. to Plan ofReorganization Proposed by the CPUC filed on July 11 plan, leading to the ultimate confirmation of the PG&E Plan and undoubtedly making a substantial 17,2002 (Docket No. 8,929);

12 12 contribution to the PG&B case.

(vi) Stipulation to Modify Plan Proposed by the CPUC Regarding 13 Trestnent of Clas 6 Claims filed on August 2,2002 (Docket No. thi 13 22. Kave Seholer's work with

• sneteal smb ommIttee of the PG&E Commfttee

-J 0 9,918); 0 14 ° 14 nbstantdl~lv contrlbnterd to the PG&E ease by resolfing Issues with proposed versions of the U (vii) Joinder of the Reorganized CsIPX to Objection of Powerex t.)

(n)15 Corp. to Disclosure Statement for Plan of Reorganization Proposed by PG&E, PG&E Corporation. and the PG&B Commnittee filed on July U) 15 P&E Pgn.

IW 16 23, 2003 (Docket No. 13,221); and >- 16 Fees - S2,509.25 Task Code - "Sub" -A 17 (viii) Reorganized CaIPX's Joinder to Oljections of Powrex Y 17 As part of the Participants Committee's efforts to assist PG&E in drafting a onsensuiplan.

Corp., Reliant Energy Services, bnc, and Dynegy Power Marketing, 28 Inc. to Plan of Reorganization for PG&E dated July 31, 2003 filed on 18 the Participants Committee formed a speCal P3&E subcommittee (the 'CalPX Subcommittee" to September 2,2003 (Docket No. 13,547).

19 19 help address Participant concerns. On numerous occasions, I met with members of the PG&el 20 20 Subcommittee of the PGCE Committee to develop and analyze these issues of concern via-a-via'

20. These pleadin, among other thWi (a) challenged the lack of ny explanation of 21 21 PG&B's plan of reorganization. Subsequently, I and members ofthe CalPX Subcommittee signed how unsucessfully disputed claims would be paid; (b) questioned how funda would be reserved for 22 22 confidentiality agreements with PG&E, obtained confidential informafson from PG&B, and met with the Cla 6 claims; (c) called for a disputed claims resrve or escrow account to hold the Class 6 23:. 23 PG&E to provide input on PG&E's development of its plan. These efAdorts undoubtedly made a fnnds, (d) objected to estimating the Class 6 claims fot feasibility purposes at hundreds ofnmilllons of 24 24 substantial contnbution to the PG&E case because they led to the Class 6 Stipulation and the dollars lower thn actually anticped: (e) demanded specificity with respect to the timing of 25 25 eventual confirmation of PG&E's plan.

paymeat to Class 6 creditors; and (f) challenged the impoper characterization Class 6 claims as 26 26 23. CsIPX. thronab the Particiants Committee. substbidtaly contributed to the unimpaired. As nrest ofthese chalenges and demnds, PG&E's disc re stament included 27 27 rG&R! case by ch llenatw PG&E's motion to estbnate Participant claims.

more meaningNil and complete disclosure and the proposed plan became fbasible and thus, more 28 28 Fees - S24,286.00 Task Code - Eart" 31 32 mueo wMM C sPwrs Requet for ?armen or Su at-nstutll Ctmmibstion C hain,2164.

mmb 231M.Wro ? a T It"e u s for CWrs fS bt n~atl CwtntKnion t Psymbat ofSubdaiii C aib te Claim t

1 As part of PG&E's efforts to avoid adequately funding a disputed claims reserve for Class 6 Authorities of Official Committee of Participant Creditors of the California Power Exchange 2 claims (described in the discussion of PG&E's proposed plan and disclosure statement in Article V.2 Corporation in Support of Debtors Motion for Temporary Allowance of Claims of Certain 3 above). PG&E filed a "Motion for Order Determining Procedures for Estimating Certain Claims for Electricity Generators and Disallowance of Claims of California Power Exchange for Plan Voting 4 Plan Feasibility Purposes" on March 1, 2002 (Docket No. 5,008, the "Estimation Motion'). The Purpose? (Docket No. 6955) explaining the importance of this voting procedure. The Court 5 Estimation Motion requested, among other things, the Court to allow PG&E to estimste Class 6 approved the proposed voting scheme on June 17, 2002 (Docket No. 7332).

- 6 claims at S1.1 billion instead of S1.7 billion (the amount of the CalPX Prepetition Claim). In an 26. Although both the Participants Committee and PG&E worked to support the same 7 effort to ensure fair voting on the PG&E Plan, the Participants Committee filed its "Opposition of 7 goal, i.e. approval of the proposed voting procedures, their work was not duplicative. The 8 Official Coirnittee of Participant Creditors of California Power Exchange Corporation to PG&E's 8 Participants Committee's work: (a) convinced CaIPX not to oppose the voting procedures, (b) 9 Motion for Order Determining Procedures for Estimating Certain Claims for Plan Feasibility 9 lessened the burden on PG&E and its counsel by not having to counter Participant and CalPX 10 Pnrposes on March 22, 2002 (Docket No. 5434). The Participants Committee objected to the 10 objections, (c) was necessary to ensure Participant support, and (d) facilitated the Court's appmval of 11 Estimation Motion because, among other things: (a) the CaIPX Prepetition Claim was neither 11 the proposed voting scheme. The Participants Committee's work also substantially contributed to t 12 contingent nor uniiquidate, (b) PG&E's potential refund was not susceptible to estimation, and (c) 12 the PG&E case because it helped create and obtain approval of a fair and equitable voting scheme for i 13 estimation was not warranted to avoid delay. Furthermore, the Participants Committee's opposition h 13 Class 6 claimants.

0

° 14 highlighted PG&E's real goal behind the Estimation Motion - to unfairly lower the amount and thus, ° 14 27. Througl' Its counsel, the Reorganized CalPX made a substantlal contributlon to 0 0 5 inadequately fund, the disputed claims resve. the PG&E case by assistiU with the creation of the Class 6 escrow aecouu t

)- 16 24. Several parties, including CalPX, filed joinders to the Participants Committee's > 16 Fees - $43,224.18 Task Code - "Escrow" 17 opposition which ultimately defeated PG&E's efforts to estimate the Class 6 claims and under-fund Y 17 The Reorganized CalPX successfully negotiated the terms of an escrow agreement for a Sl.6 18 the Class 6 disputed claims reserve. Negotiations then ensued, which eventually ensured adequate 18 billion escrow account (the "Escrow Agnrement") with PG&E for the Class 6 claimants. During 19 funding of the disputed claims reserve and the creation of a truly feasible plan thereby making a 19 these negotiations, Kaye Scholer researched issues of general concern to all of the Class 6 claimants 20 substantial contribution to the PG&E case. 20 and helped assure the Class 6 cliriants that their interests were protected. Kaye Scholer's reseach 21 25. BY assistlig PG&E In the creation of voting grocedures to deal with the Class 6 21 and participation in negotiating the Escrow Agreement. (a) resulted in numerous changes to the 22 claims. CaiPX. through the Participanta Courruitt substantially contributed to tie PG&E 22 Escrow Agreement, (b) ensured that the Escrow Agreement was duly authorized and cnforceable, 23 23 and (c) prevented individual Class 6 claimants from objecting to the Escrow Agrerncen I also 24 Fees - $26,248.02 Task Code - 'Voting" 24 appeared at the hearing on the Escrow Agreement on behalf of the Class 6 claimants leading to the 25 PG&E filed its "Motion for Temporary Allowance of Claims of Certain Electricity 25 efficient and timely approval of the Escrow Agreement by the PG&E bankruptcy court on March 5, 26 Generators and Disallowance of Claims of California Power Exchange for Plan Voting Procedures" 26 2004. Accordingly, the Reorganized CaIPX, through its counsel, made a significant and substantial 27 on May 13, 2002 (Docket No. 6444), seeking Court approval of a voting procedure for the Class 6 27 contribution to the PG&E case which was not duplicated by PG&E, the PG&E Committee, or ther 28 claims. On June 3, 2002, the Participants Committee filed its "Memorandum of Points and 28 respective counsel.

33 34 l3 -3URWPD) CAM's Requaia for Paymou offlub"tial Coaubutim Claim 2uw".VIM CalPX-, Requed for Paymaentof!ltlBti&l C-Mbetion Claim

28. The Ileorgurtiz CIlPX Is entitled to reimburaememt for tlyte sentp renarlig DECLARATION OF CORRINE J REKBN the Substontal Contrnton Ciatm. 2 Fees - 78,761,60 Task Code - "503(b)(3)" 3 L Conine J. Rebhua, declare.

Pursant to applicable case law, CalPX requests rnimbuenewt of its attorneys fees in 4 1. I sn an associate with the law firm of Kaye Scholar LLP CKaye Scholer"), counsel preparing theApplication. 59 for the Reorganized California Power Exchange Corporation ("CaIPX") and, prior to April 1,2003, 6 counsel to the Official Connitbte ofParticipant Creditors of the California Power Exchange I declare under penalty of peruy under the laws of the United States of America that te 7 Corporation (the "Participants Conmmittee). I have personal knowledge of the fhct set forth herein foregoing is trte and coaecL 8 and, ifcalled as a witness, could and would testify competently thereto. Capitalized terms not 9 otherwise defined herein have the meanings ascribed to them in the pleading to which this DaE: July'X, 2004 10 declaration is attached.

21 2. The work ofGreenberg and Kaye Scholar which substantially contributed to the Marc S. Cohen 12 PG&E case flkis into the following seven categories:

Ix J 13 0 I 14 Ee Incurred 0W 1. FRBP 2004 Document Production S60,927.15 U) C. 15 Requests to CNIPX byPO&E YI 16 2. PG&E PlianDS S280,955.31 Zi 17 3. Work with the PG&E Subcommittee of S2,509.25 ;I.

the PG&E Committee 28 4. Opposition to PG&E's Motion to S24,286.00 Estimate Class 6 claims *S-19 S. Voting Procedures for Class 6 claims S26,248.02 20

6. Procedines for the Class 6 disputed S43,224.18 21 claims reserve aNWescrow 22 7. Preparation of the Application ,z S78,761.60 Total K 5516,911.51 23 24 25 TMe detailed billing statements for Greenberg and KayiScholar are attached to the Appendix 26 as Exhlbits T and 7.'," respectively. Next to each time entry included in the Application is the 27 code fbr the task category into which such entry was assigned in compiling the Application imnne 28 35 36 CsIPX.5 tsr Ps)¶nerrt of Substantial Ctnbittur Claim nUM4W5o CaIPXs ReqestO r Parremt of Subtantial Ccntbli Caim 22l34945.wI'o nwmm CalmXs Request Rato for t~n of Subsntmfl CmntnaN" Chim

entries without task codes assigned to them are not included in the Application. I personally DECLARATION OF MIC}AEL SCHENK 2 assigned the task codes to each of the time entries which are contained in Appendix Exhibits "I" 2 3 and ".", with the exception of the task codes assigned to Kaye Scholers time entries reported during 3 1,Michael Schenk. declare:

4 June, 2004 which were assigned by Ashleigh Danker and Marc Cohen of Kaye Scholer, and 4 I I am a paraprofessional employed by Kaye Scholer LLP ("Kaye Scholer') I have supervised the compilation of the summary contained in this paragraph. 5 personal knowledge of the facts set forth herein and, if called as a witness, could and would testify 6 3. All of the amounts listed in the summary which were incurred prior to April 1.2003 6 competently thereto. Capitalized terms not otherwise defined herein have the meanings ascribed to 7 were: (a) incurred by proessionals (Greenberg and Kaye Scholar) whose employment was approved 7 them in the pleading to which this declaration is attached by the CaLPX Bankruptcy Court pursuant to 11 U.S.C. f§ 327 and 1103; (b) have been approved as S 2. At the request of Conine J Rebhun of Kaye Scholar, I calculated the total hours of 9 reasonable, actual and necessary by the CalPX Bankruptcy Court; and (c)have been paid pursuant to 9 service performed by Greenberg by adding the time entries contained in Appendix Exhibit 9'"

10 11 U.S.C. § 330 by final order of the CalPX Bankuptcy Cour The amounts incurred after April 1, 10 which are marked with task codes for inclusion in the Application and detenrined that 102.6 honrs 11 2003 were billed in accordance with the same standards a those approved as reasonable, actual and II of service were perfbnead by Qrcanberg.

12 necessary by the CalPX Bankruptcy Court. 12 3 Also at the request of Ms. Rcbhun and Ashleigh Danker of Kayo Scholar, I calculated 13 4. To the best of my knowledge, information and belief, the time entries which I have -.1 13 hi the total hours of service performed by Kaye Scholar by adding the time entries contained in 14 identified in Appendix Exhibits "I" and "J" for inclusion in the Application and assigned task 0 W~ I 14 Appendix Exhibit "JO which are marked with task codes for inclusion in the Application and t)

(IC 15 codes include only those for services directly related to the PG&B chapter 11 case, and do not (f 15 determined that 1,176.558 hours0.00646 days <br />0.155 hours <br />9.22619e-4 weeks <br />2.12319e-4 months <br />" of service were performed by Kayo Scholar.

16 include costs incurred in connection with other proceedings such as those before FERC, the CaJPX t16 I declare under penalty ofperjury under the laws ofthe United States of America that the 17 bankruptcy case, or in state and federal court litigation, which were directly or indirectly related to V 17 foregoing is true and correct.

18 PG&E. 18 Dated: July L2004 19 5. Biographies of each of the Greenberg and Kaye Scholar professionals and 20 paraprofessionals whose serviees comprise the Substantial Contribution Claim are attached to the 19 20 2bc AelSh-1 21 Appendix as Exhibit "IL" 21 22 I declare under penalty of pequry under the laws of the United States of America that the 22 23 foregoing is true and correct 23 24 Dated: July 2I12004 24 25 25 26 26 " Kaye Scholer's professionals and paraprofessionals bill thdir time in five minuts incremeItL 27 27 However, Kaye Scholar's billing softwarc converts those entries into comparable increments representing hundredths of an hour - thereby causing certain time entries to be broken down 28 28 into thousandths of an hour.

37 38 _ __________________

X160OWD calwa Rcqueor for nenatof Subtnial CcinioaCbaim ..AI C"IPX' RtW fr enymt ofSubdmil Cwn Claim t