ML042170289

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

ML042170289
Person / Time
Site:	Diablo Canyon
Issue date:	07/26/2004
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: ML042170289 (20)

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1 Patricia W. Pellervo 2

PricewaterhouseCoopers LLP 199 Fremont Street FILED San Francisco, CA 94105 JUL 2 7 2004 3 Telephone: (415) 498-6190 Facsimile: (415) 498-5156 vNfBlqgjgqlas PM}

4 5 Accountants and Financial Advisors for Official Committee of Unsecured Creditors' 6

.7 8

9 UNITED STATES BANKRUPTCY COURT 10 -NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 11 12 13 In re Case No. SF 01-30923 DM 14 PACIFIC GAS AND ELECTRIC Chapter 11 15 COMPANY, a California corporation, 16 FINAL APPLICATION OF Debtor.

PRICEWATERHOUSECOOPERS LLP FOR 17 ALLOWANCE AND PAYMENT OF 18 COMPENSATION AND REIMBURSEMENT OF EXPENSES 19 -.- . i -.. - _ ; (SEPTEMBER 1, 2002 THROUGH' FEBRUARY 28,2003).

20 Hearing: . .

.21.

[No Hearing Scheduled]

22 23 24 25 26 27 28 e) 1

1 TO THE HONORABLE DENNIS MONTALI, UNITED STATES BANKRUPTCY JUDGE, THE OFFICE OF THE UNITED STATES TRUSTEE, THE DEBTOR, AND 2 OTHER PARTIES IN INTEREST:

3 4 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 Practice of PwC. This Final Application for PwC covers the services 9 performed by PwC personnel that were not transferred to FTI. Michael Hamilton performed the 10 majority of the services billed on this Final Application. Mr. Hamilton was hired by FTI on 11 March 1, 2003, and since that date, FTI has billed for his services.

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

15 16 INTRODUCTION 17 18 This is the final application filed by PwC for approval of compensation and 19 lreimbursement of related ekperi es for services tendered on behalf of the Committee during 20 PG&E's chapter 11 case since its BRS Practice was sold to FTI. PwC submits this Interim 21 Application in accordatice with'Bankruptcy Code sections 330 and 331, Rule 2016 of the Federal 22 Rules of Bankruptcy Procedure (the "Iankruptcy 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 Final 26 Application, PwC seeks (i) final 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. PwC has already 2

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received payment oI tnese iees . .

2 Durngth-Fna 2During the -Fital'Application Period, PwC professionals spent a total of 162.4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br /> rendering services to the Committee in connection with the PG&E bankruptcy case 4 9 at a blended hourly rate of $634. t Michaei Hamilton, a partner with PwC, performed the 5majority of the services'for PwC. 'His workwias support6d by analyses and research performed and billed by FTI staff per*soiie'l'vwC so incurred $23;859 in osts

7. expenses in connection with thoiose services, for which PwC i requestig reimbursement.

o Accordingly, PwC'seeks' allow'ance of a total -of$26,755 for'services rendered and 9reimbursement of costs ad'expensesin'&iiredduring~tle Final Application Period. PwC 1 received $111,321 i s'trom's ffe- November 26, 2003 cover letter' 11 application. All fees'an'd expen esfincurd by PWC prior to September 1, 2002 aire

12. rreported in FTIs 'Finail ';Applica'tiso; vces -'Thaid costs performed by PwC during 13 this Final Applicatio Peflo'd 'arede ied ow and 'are detailedinthe' exhibits'filed concurrently herewith.

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17

SUMMARY

OF DEVELOPMENTS I THE CASE 18 ," .;. , ... t.l Y'1') . '*.i!.'; i;. .......-

19 On April 6,, 2001 (the "Petition -Date%'.), ?,,aific,,Gas sand :Electric Company (the 20 "Debtors") filed voluntary petitionsffor reorganization under. Chapter 1.1 of-title l of-the United 21 States Bankruptcy Code (,'Bankrptcy Code'! ,.U Debtorscontinue to operate their business 22 and manage their properties as debtors-.in-possession pursuant~to Sections: 1107(a) and 1108 of 23, the Bankruptcy Code. . * ,  ;,;; r. , is, 25 On July 2, 2001 this, Court entered -an order (the "Retention Order") authorizing, nunc pro 26 tun, employment of PwC as of April 11, 2001, as Accountants and Financial Advisors for the 27: Committee. .  ; '  : - . . -

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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:

3 4 (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; 9 t)

(c -Advice and guidance'to 'the Committee with respect to utility accounting l10 and electric and gas utility operating eemeftst, including elemnents of rate making, cost recovery 11 and the financial impact of regulatotyldecisaons; ' '

12 (d) ' Assistance and adviceto the Committee with respect'to the value of the 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 riot liited 'to, cash flow priojections and budgets, cash'

'17 receipts and disbursement dinalysis,aya~ysis of various! asset and liability accounts, and analysis 18 of proposed transactions for which Coourt approVal is ;sought; 19 .. (f) Attendanice at meetings and assistarce 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 c6'nfirmiation'of 'a Plan of Reorganization in this chapter 11 case; 24 (h) Assistance to the Committee and its counsel in the preparation and 25 evaluation of potential litigation; 26 (i) Assistance in the discharge of the Committee's duties and functions in this 27 case, including, but not limited to, compilation of material required for court testimony; and 28.

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1 , (j) . Render.such other general business consulting or such other assistance as 2 the Committee or its counsel .may deem necessary thatfar'e`not duplicative of services provided 3 by other professionals in this proceeding.

4.

5. As mentioned above, the Business Recovery Services practice (the, 'MRS Practice") of 6 PricewaterhouseCoopers LLP ("PwC").,was acquiredby FTI Consulting, Inc. ("FTI"). This final 7 application for PwC covers the services.performed by PwC personnel that were not transferred to 8 FTI. PwC incorporates by reference'the overview of case activity presented in Sections II and III 9 of the Final Application of Milbank Tweed Hadley & McCloy LLP for Allowance and Payment 10 of Compensation and Reimbursement of Thcpenses. The Debtor continues to operate its business, 11 and cash flow appears to be neutral pendingregulatory decisions -bythe California Public 12 Utilities Commission. A plan has eeni case and PG&E emerged from d' b n.Snfi ed in the cs n GEeegdfo' 13  ;'bankruptcy during April 2004,, .a, [ .. *.. ,i, ,

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16- SUlMMAY OFP~WC'S gRACTICE EXPERIENCE,.  ;.'

17? PwC has extensive eexperie~nce i~n financial ~reo~rgani~zations, regulatory accounting and 18, reporting, bankruptcy con~sultjng anSI tax ,serv~ices.}, 9ur professionals have provided services to 19 . a wide, variety.of industries, aindas axresult, ,P.wCe has apccunmulated a Wealth of knowledge':

20 *concerning the i~ntricacies i~n th e~s~e~xatte~rs.. ^,, -:

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23 , ,

SUMMARY

OF SERVICES RENDERED BYPWC .

24 'Durn th ia.Aplct Period, PwC represented and advised the Commrittee with'

'25 respect to a wide range 'of issues and challeng'es. Due to the comrprehe'nsive nature of the 26 services rendered by PwC during the Final Application Period, no attempt is made herein to

27. detail the totality of such services. Thefull scpe the services of rendered by PwC is set forth in 28 detail in the billing reports filed concurrently herewith under captions entitledo 5

I "PricewaterhouseCoopers LLP's Time Records Exhibit for the Period September 1, 2002 to 2 February 28, 2003" (the "Billing Reports"). However, in order to assist the Court, the United 3 States Trustee, PG&E and other parties in interest in reviewing this Final Application, a brief 4 summary of PwC's billing procedures and the services rendered by PwC during the Final 5 Application Period with regard to each activity code category, including certain undertakings 6 within each category, is set forth below.

7 A. Summary of PwC's Billing Procedures.

8 It is PwC's normal business ce to charge its clients in full for services rendered and 10 all actual and necessary out'of-pocket cost's and expenses incurred by PWC in providing those 11 services.

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In the ordinary course of its practice, Pw?, rantains, records of time expended by 13 professionals in rendering services to its clients, Time ,Fpcords are made substantially contemporaneously with the rendition of these professional services and are prepared by the 15 professionals who have rendered the: services. In. matters such as this, time records are kept in 6 16 minute (.1 hour1.157407e-5 days <br />2.777778e-4 hours <br />1.653439e-6 weeks <br />3.805e-7 months <br />) increments.!,

17 18 This case, which is one of the ten largest bankruptcy cases filed in the United States, has 19 involved significant interaction witlihoutside'agencies, including the Federal Energy Regulatory 20 Commission, the California Pubiic ftility Commissibon ("CPUC"), the California Energy 21 Comm'ission, ihe Devartent of Water & Power ("DWR"), the State Legislature, the Governors 22 Office, as'well as taxing authorities and othler reporting agencies.

23 Michael Hamilton is PwC's senior Utility Specialist in Accounting and Regulatory 24 Matters. He has participated in each of the restructurings that have involved a utility for the Firm 25 over the past 25 years. He has unique knowledge of the regulatory and business environment 26 facing utilities. Mr. Hamilton has coordinated the Committee work on plan structuring, 27 regulatory matters, cash flow projections anidlegisl~ative matters.

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1 The remaining services provided by PwC relate to research and support on tax issues of 2 the two plans filed in the case.

3B. Summary of Exhibits Regard-ng Services cndecf'ed By PwC.

PwC has' attached the following exhibits as support to its Appiication:

5 6 1. Exhibit I - A summary schedule showing the professionals who performed the 7 services, the number of hours spent, the respective professional's billing rate, and the total fees 8 for such services; '

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2. "

Exhibit 2 - Summary of Fees by Project Category and itemized time records, in I.,. *I. -' . . - . . . .I......

10 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 12 performed the service, (3) a description of the services rendered, and (4) the time spent 13 performing the service inoiicrenieiifs off tentli§Thn lh hiir*'or-ttis' Final Application; 14 . 3. Exhibit 3'- Expens' Su and'Expense Detail reports byindividuai and.:

itemized total expenses for wh hinriebiribi'riiei T'is souight. All 'expenses forI which" 16 reimbursements are sought iindtai'b "re'is individuaL It'ishould be noted that any.

17 airfare charges were incurred as a result of travel in coach class. 'PwC'has not requested 18 reimbursement for certain out-of-pocket expenses when-it would not be possible to assemble the 19 billing details for reimbursement under the Guidelines. These unbilled out-of-pocket expenses 20 typically include telephone charges for calls placed in its offices, postage costs including;Federal 2121iO{:,Express charges and copying and facsimile charges incurred at the Applicant's offices in 22 connection with these cases. These unbilledout-of-pocket expenses are real costs that have been 23 incurred by PwC and have benefited the Estate.

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26 C. Narrative Summary Of Services Provided By PwiC. ' "

27 PwC has submitted detailed listings of time incurred byjprofessional by task for the 28 monthly Cover Sheet Applications to the Debfor, Committee, the United States Trustee aid the 7

I Court for the period covered by this Final Application. PwC has reclassified some of the detailed 2 time into categories that more appropriately reflect the work performed. Reclassification were 3 made to harmonize the categorization among professionals.

4 5

1. Cash Flow Analysis (Category 01).

6 7 During the Final Application Period, PwC professionals spent a total of 1.3 hours3.472222e-5 days <br />8.333333e-4 hours <br />4.960317e-6 weeks <br />1.1415e-6 months <br /> 8 rendering services in this category, for which PwC seeks compensation of $832. A summary of 9 the PwC professionals who rendered services in this category and the corresponding amount of 10 fees requested is included in Exhibit "2." The Billing Report for this category, which sets forth a il detailed description of'the services rendered, is filed concurrently herewith.

12 13 Services rendered by PwC professionals in this category included:

14 a) PwC analyzed the Debtors' cash flow forecasts to develop an 15 understanding of-the Debtor's liquidity position and its ability to generate sufficient cash to fund 16 the proposed Plans of Reorganization and required capital expenditures.

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2. CPUC Plah of Reorganization (Category 02).

9 During the Final Application period, PwC professionals spent a total of 10.7 hours8.101852e-5 days <br />0.00194 hours <br />1.157407e-5 weeks <br />2.6635e-6 months <br /> 20 rendering services in this category, for which PwC seeks compensation of $6,848. A summary 21 of the PwC professionals, who rend&eed services in this category and the corresponding amount 22 of fees requested is included in Exhibit "2." The Billing Report for this category, which sets 23 1forth a detailed description of the services rendered is filed concurrently herewith.

24 25 Services rendered by PwC professionals in this category included:

26 1a) PwC reviewed the CPUC plan and helped in the preparation of the trial 27 memorandum filed by the OCC in support of the CPUC plan. Mr. Hamilton's knowledge of 28 8

regulatory issues was critical in the preparation of the OCC's trial brief 2 CPUC Review (Category 03).

3 . -. .

4 During the Final 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 6 the PwC professionals who rendered services iniithis category and the corresponding amount of fees requested is included in Exhibit "2." The Billing Report for this category, which sets forth a

.- . , *  ; 9. '.; .'. - r7 . 7-, ... l 8 detailed description of the services rendered is filed concurrently herewith.

- .Servicesrendered by P -wCprofessionals in this category included: '

10.:

11 a. '

PwC reviewed material .

filed CPUC proceedings.to determine the potential

.j.'.a...A 12 ' financial impact the proceedings could have on the Debtor and the Plans of Reorganizationunder 13 consideration. ./.' t;i ';' ' if' A', a ' . .. * . .; . i.

14 4.- .CPUC/OCC PlaitiofRe6rgaiiiiaitiion.(Catego" y 04)i 16 During the Final Application Period, PwC professionals spent a total of 115.5 16

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17 hours rendering services in this category, for which PwC seeks compensation of $73,530. .-A 18 summary of the PwC professionals.vho rendered-services in this-category and the corresponding 19 amount of fees requested is included in Exhibit "2." The Billing Report for this category, which 20 sets forth 3adetailed description of the services rendered is filed concurrently herewith.

21 22.Services

-' .  ::cQ - r.;

rendered

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byewc

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it a prqqfessionals-inhthis categoryincluded:

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23 a) Mr. Hamilif6n spent considerable time in this category consulting with the

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'- ' *'. .'-' . ' ^: .:.-;.- -' . .;' -. . ' 9 24 Committee, the Committee's professionals, the CPUC and its professionals, S&P and FTI on 25 joint plan structures and steps needed to insure both confirmation and acceptable credit ratings.

26 Mr. Hamilton was also actively involved with UBS Warburg in developing an accurate joint plan 27 mio'del. thHe'~wiasinstrimentailin the preparation of FTI's (Thomas Lumsden's) testimony in 28 suport of the Yo1nt`Pla-n..

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1 b) Mr. Hamilton was active in meetings with the rating agencies to support and 2 articulate concepts proposed under the Joint Plan.

3 5. Debtor Plan of Reorganization (Category 05).

4 5 During the Final Application Period, PwC professionals spent a total of 16.7 6 hours rendering services in this category, for which PwC seeks compensation of $10,688. A 7 summary of the PwC professionals who rendered services in this category'and the corresponding 8 amount of fees requested is included in Exhibit "2."4 The Billing Report for this category, which set forth a detailed description of the services rendered are filed concurrently herewith.

10 Services rendered by PwC in ihis category included:

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

,12; - . ;E attending court hearings, reviewing depositions for the confirmation trial, and reviewing new 13 materials submitted as support for the Debtor's plan. PwC's work in this category was used to 14 o the Debtor's Plan progress and the reasonableness of the advice the OCC on Plan being 15 confirmed. This work was also instrumental in understanding what drivers might be used to 16 incite the Debtor in a Settlement Agreement.

17 18 6. DWR Contracts Analysis (Category 06).

During the Final Application Period PwC professionals 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 /> 20 rendering services in this category, for which, PwC seeks compensation of $1,152. A summary 21 of the PwC professionals who rendered services in this category and the corresponding amount 22 of fees requested is included in Eixhibit:"2."' The Billing Report for this category, which sets 23 forth a detailed description of the services rendered is filed concurrently herewith.

24 25 Services rendered by PwC professionals in this category included:

26 a) PwC reviewed the S&P credit rating analysis on the DVWR bond issuance 27 to determine if the DWR contract costs assumed in the two competing Plans were in line with 28 10

final bond costs. The DWR issuances were also seen as a proxy for the potential costs and 2 market appetite for bonds issued under~either of the Plans under consideration.'

7. FERC(CategoryO7). .,.. , * . .. .

4 5During th na ppication Period, PwCprofessionals 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 /> 6 rendering services in this category, for which.FTTI/PwC seeks.compensation of $2j, 12. 'A 7 summary of the PwCoprofessionals..ho rendered services in this category and the corresponding 8 I amount; of fees Requested is included in, Exhibit. "2." The Billing Report for'this category,.which 9 sets forth.a detailed description of~the servicesrendered is filed concurrently herewith.

10 Services rendered by PwC.professionals in this category included:,

12P wC mon'itoired FERC proceedings to determine the potential finaincial 12;; i' .*! '< ^ 1' i, -:; i d!'* I'.

13 impact of regulatory proceedings on the Debtor's Estate, including possible changes in rates, 13 .; .  ; i - ' . . i

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14 generator refunds, settlement of the California PX/Generator claims, and progress on the 15 Debtor's filings requesting FERC approval for various aspects of its Plan of Reorganization.

17 18 8. General Committee Matters (Category.O8j...

19  ; r t ,nal.AppliationwPer iod ~w(professionals spent a totalof7.2hours rendering services in this c f $4,608. A summary

.21 of thePwC professionals .who rendered services inrthis category and the correspondinig amount 22, of fees.requested is included in Exhibit "22." 'Th&Billing Report for this category, which sets 23 forth a detailed description of the services rendered is filed.concurrently herewith.

24 25 Services rendered by PwC professionals listed inthis category included:

26 a) PwC prepared for and attended numerous Imeetings and conference calls 27, including the full Committee on various issues including general case administration, financial 28 . . .- , ..,

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I issues, regulatory issues, litigation issues and Plan issues.

2 b) PwC personnel prepared for and participated in various formal and informal conference calls between Committee members, Committee working group members, Committee advisors and PG&E regarding the financial impact of various motions brought by 5 PG&E, the Debtor's and the CPUC's proposed plans of reorganization, the OCC's alternative 6 plan and other issues surrounding the Debtor's estate.

7 8 9. Tax Review (Category 09).

During the Final Application Period, PwC professionals spent a total of 5.0 hours0 days <br />0 hours <br />0 weeks <br />0 months <br /> 10 rendering services in this category, for which PwC seeks compensation of $2,550. A summary H of the PwC professicrials 'vwho tendered services in -this category and the corresponding amount 12 of fees requested is incluued in Exhibit "2." The Billifig Report for this category, which sets 13 forth a detailed description of the services rendered is filed concurrently herewith.

14 q h ith.

15 Senices rendered by PwC piofessionials listed in this category included:

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

18 19 PwC researched and summarized key tax issues of the Debtor's Plan of 20 reorganization for the Committee and the tax impact of alternative plan proposals, highlighting 21 the potential financial impact on the Debtor and any potential tax liabilities to the creditor. PwC 22 also kept the Committee appraised of the status on IRS submissions and the implications of the 23 CPUC's proposed tax sharing agreement.

24 25 1

SUMMARY

OF ACTUAL AND NECESSARY EXPENSES INCURRED BY PWC 26 27 PwC maintains records of all actual and necessary out-of-pocket expenses 28 incurred and typically charged in connection with rendering professional services to its clients in 12

1 the ordinary course of its business practice. As is typical of PwC's practice when representing creditor committees, PwC has reduced to cost or not charged certain of these out-of-pocket 3 expenses to the estate in accordance with the UST Guidelines and the Court Guidelines and to 4 ensure the reasonabieness of PwC's fee and expense request. A brief explanation of certain 5 costs incurred and charged to the estate is set forth below

6 (a) PwC does not charge its clients for photocopying done in-house;' copying I7 done by third-party services is charged at cost;

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

'10 and'otherspecalizeds~earc'hes' a'nd serv'i~es',such 'asmessengers and library retrievals, at cost;

'*1 1 (c) 'PwC charges its clients dormileage ($0.3 :per mileif sought) and 12 parking'costs incurred ,by its professiooals incopection withlservices rendered, at cost;'

13 14, ' (d) P Ccharges 'its clients for 'ransportation' and travel-related costs 15 including out-of-tovwn meals, excluding lunches, incurred by.its professionals when'working on 16' specific client matters, at cost; and ,  ; -.  ; -- '

19.

17 (e) PwC normally charges its clients for the cost of overtime and weeke'nd 18 meals and transportation when pressing client matters require the professional to work past 19 normal office hours; however, in accordance with the UST Guidelines and the Court Guidelines,

20. no such charges are included in this Final Application.

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22 23 COMPENSATION REQUESTED AND RELEVANT LEGAL STANDARD 24 To grant a request for compensation pursuant to Bankruptcy Code section 330, 25 the Court must find that such request is reasonable. The reasonableness of a compensation 26 request is determined by the "lodestar" method. See In re Yermakov 718 F.2d 1465, 1471 (9N 27 Cir. 1983). Under the lodestar approach, "reasonable" compensation is calculated by 28' 13

I multiplying the number of hours reasonably expended by the hourly rate of the professional. In 2 re Rheuban, 121 B.R. 368, 383 (Bankr. C.D. Cal. 1990). There is a strong presumption that the 3 lodestar product is reasonable under Bankruptcy Code section 330. See In re Drexel Burnham 4 Lambert Group, Inc., 133 B.R. 13, 22 (Bankr. S.D.N.Y. 1991).

5 The reasonableness of a professional's hourly rate is based on the cost for 6 comparable services charged in the area,'in non-barruptcy matters. See In re Yermakov, 718 F.2d at 1471. The reasonableness'of the-hou's expended 'on a task is based on whether the 8 services provided were actual and necessary. See In re Nucorp Energy, Inc., 764 F.2d 655, 658 9 (9 hCir. 1985).

10 11 PwC's fees are reasonable given the size and complexity of the bankruptcy case 12 and are commensurate with the fees that PwC has been awarded in comparable chapter 11 cases 13 and that accountants and financial advisors of comparable experience and expertise charge on a 14 regular basis to represent creditor cofiiifi~ees ifr comparable chapter 11 cases. Accordingly, 1 utilizing the lodestarmethod, PwC's fee' and expense' reqbest is'reasonable and should be 16 allowed and paid pursuant to Bankruptcy Code section 330. See Drexel, 1i33 B.R. at 22.

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4 -,;.-, - . .CONCLUSION!' ,, .*

5 For the reasons set forth above and pursuant-to Bankruptcy Code sections 330 and 331, Bankruptcy Rule 2016, the Court Guidelines, the USTGuidelines and the standards adopted by.courts in awarding accountants' and financial advisors' fees and costs, PwC submrnits that the 8 . fees.for services rendered and costszand expenses incurred on behalf of the Committee during the Application Period in the total amount of $126,755 are reasonable and should be allowed.

10 11 ., WIHEREFORE PjwC respectfullyrequests that this Court enter an order.

l1. Approving this Final Application in its entirety; 13 , -. -a. '- -

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14 , . 2. .,. Approving pomrpensation in the amount of$102,896 for'pr6fessiohal..

15 seiyicps rendered and reirmbursemrent of costs and expenses incurred in'the.amountfof $23,859, 16 ,for~atotal amountof$126,755. -1  :.,.'i- - a- r.7 '* ,

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

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1 DATED: July 26, 2004 Respectfully submitted.

2 PricewaterhouseCoopers LLP 3

5 By: /

- : ' ' -Patricia W. P61lervo' 6

Accountants and Financial Advisors to Official Committee 7 of Unsecured Creditors 8

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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 5

Trustee ("Court Guidelines"). I am replacing Tom Lumsden, as the engagement partnerfor

.6 .

PricewaterhouseCoopers.LLP.in connections with this matter. I certify that (a) I have read the 7 -

Interim Application; (b) to the best of my knowledge, information and belief, formed after 8

reasonable inquiry, the compensation and expense reimbursement sought is in conformity with 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 less 11 .- .. .: ^. .' ' .- '

favorable than those customarily employed by PwC and generally accepted by PwC's clients.

12 13 DATED  : 4,lPŽ?Pl 14 Patricia W. Pellervo 15 v 16 17 18 19,. . .. - -  : -I:.-

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26 27 28 17

1 DECLARATION OF PATRICIA W. PELLERVO 2

I, Patricia W. Pellervo, declare:

3 4 1. 1 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's services as accountant and financial advisor to the Official Committee 8 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 maintained by PwC in the ordinary course of business I1 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 24{2. This declaration is submriitted in stipport of the "Final Application of 14 PricewaterhouseCoopers LLP For Alionvaiice and Payment of Compensation And 15 Reimbursement of Expenses (September 1, 2002 Through February 28, 2003)" (the "Final 16 Application"). Capitalized terms not otherwise defined herein shall have the meanings ascribed 17 to them in the Interim Application. This Final Application covers the period from September 1, 18 2002 through and including February 28, 2003 (the "Interim Application Period"). I have read 19 the Final Application and reviewed the exhibits thereto, and each of the facts contained therein is 20 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.

27

4. Pursuant to the Final Application, PwC seeks allowance of compensation 28 18

.1 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 -

2. bankruptcy case, resulting in the accumulation of $102,896 in fees for professional services 3 rendered and $23,859 for expenses incurred, for a total jimount of $126,755.

5. 'PC 4 r dprepetiton retainer in connection with this bankruptcy 5  :

case.

6  :: -.-. .. , ... ~. :,hi;-. .-.-

7 6. PwC has sbmitted monthly fee notices in accordance with the fee 8 procedures that were established by the Court., Pwq has received payments totaling $111,321 in 9 connection

,.--,4,! with the Monthly .. Cover Sheet Applications covering the ove Shet Apcai th period

• -e*ri*o* September 1, 2002 to 10 February 28,2003, comprised of $87?462An ,fees ,nd $,23,859jn expenses. . ; .

7. Noareement or un'dersianing of any kind or nature exists between FTI 12 ps o t at . ; 'j;t;.  ! -...

and any other person or entity for tsharing, dlvision, or payment of any portion of the 13 compensation awarded to Pw forse rendred or expenes incurred in connection with our 14 ,

representation of the Committee in this chaRtejj, proceeding; except as among the employees and partners of PwC. . - ..s*,; .

16 .. *~

17 8. I am one ofthe designated professionals responsible for overseeing tli6 18 billing in this matter'and for assiuring compliance with the Guidelines of the Office of theUnited 19 States Trustee for'the Northern District of California relatin'g to billing (the "Guideline 20 Based 6mponmy review of this Final Application submitted by PwC for the Application Period, I 21 believe that the Application complies with the Court Guidelines and the UST Guidelines.

22 -  ; - ' {X-U - . ..

9. Attached hereto as Ekhibit "1" is a summary of the total hours expended,

23.  : during the Application; billing rate, and fees incurred by each PwC professional Period.

25 10. Attached hereto as Exhibit .'"2" is a-summary of each category of services, 26 setting forth the name of each professional who expended time in that category and the total 27 hours and amount billed by each professional in that category during the Application Period.

28 19

I 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 Pthat the foregoing is true and correct.

5 6 Executed this 26i day of July, 2004 at San Francisco, California.

9 Patricia W. Pellervo 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20