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CRAVATH, SWAINE & MOORE LLP 

Paul H. Zumbro (pro hac vice) 

(pzumbro@cravath.com) 

Kevin J. Orsini (pro hac vice) 

(korsini@cravath.com) 

Omid H. Nasab (pro hac vice) 

(onasab@cravath.com) 

Worldwide Plaza 

825 Eighth Avenue 

New York, NY 10019 

Tel: 212 474 1000 

Fax: 212 474 3700 

KELLER & BENVENUTTI LLP 

Tobias S. Keller (#151445) 

(tkeller@kellerbenvenutti.com) 

Jane Kim (#298192) 

(jkim@kellerbenvenutti.com) 

650 California Street, Suite 1900 

San Francisco, CA 94108 

Tel: 415 496 6723 

Fax: 650 636 9251 

Attorneys for Debtors and Debtors in Possession 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION, 

 - and – 

PACIFIC GAS AND ELECTRIC 

COMPANY, 

 Debtors. 

 Affects PG&E Corporation 

 Affects Pacific Gas and Electric Company 

 Affects both Debtors 

* All papers shall be filed in the Lead Case 

No. 19-30088 (DM). 

Bankruptcy Case 

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) (Jointly Administered) 

SUPPLEMENT TO DEBTORS’ 

APPLICATION PURSUANT TO 11 

U.S.C. § 327(a) AND FED. R. BANKR. P. 

2014(a) AND 2016 FOR AUTHORITY TO 

RETAIN AND EMPLOY COMPASS 

LEXECON, LLC AS ECONOMIC 

CONSULTANTS TO THE DEBTORS 

NUNC PRO TUNC TO PETITION DATE 

Re: Dkt. No. 1756 

Date: May 9, 2019 

Time: 9:30 a.m. (Pacific Time) 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Objection Deadline: May 6, 2019 

4:00 p.m. (Pacific Time)

Case: 19-30088 Doc# 1842 Filed: 05/03/19 Entered: 05/03/19 17:26:11 Page 1 of

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PG&E Corporation (“PG&E Corp.”) and Pacific Gas and Electric Company (the 

“Utility”), as debtors and debtors in possession (collectively, “PG&E” or the “Debtors”) in the 

above-captioned chapter 11 cases (the “Chapter 11 Cases”), hereby submit this Supplement (the 

“Supplement”) to Debtors’ Application (the “Application”) [Dkt. No. 1756] filed on April 29, 

2019 (collectively, the “Supplemented Application”) for authority to retain and employ Compass 

Lexecon, LLC pursuant to section 327(a) of title 11 of the United States Code (the “Bankruptcy 

Code”) and Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy Procedure (the 

“Bankruptcy Rules”), for authority to retain and employ Compass Lexecon, LLC (“Compass”) 

as economic consultants for the Debtors effective as of the Petition Date. 

In support of the Supplement, the Debtors submit the Supplemental Declaration of Dr. Adel 

Turki, a Senior Managing Director of Compass (the “Turki Supplemental Declaration”). A copy 

of the Supplemental Engagement Letter (defined below) is annexed as an exhibit to the Turki 

Supplemental Declaration. 

In support of the Supplemental Application, an updated proposed form of order approving 

the retention and employment of Compass is annexed hereto as Exhibit A (the “Updated 

Proposed Order”). The Updated Proposed Order also reflects revisions made in response to 

informal comments received from the Office of the United States Trustee on May 1, 2019. 

 

Case: 19-30088 Doc# 1842 Filed: 05/03/19 Entered: 05/03/19 17:26:11 Page 2 of

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In their Application, Debtors inadvertently excluded Compass’ engagement for consulting 

services related to a proceeding initiated by the California Public Utilities Commission (the 

“CPUC”) to implement the requirement of Senate Bill 901 concerning utility requests for wildfire 

cost recovery (the “CPUC Consulting Services”). The Debtors engaged Compass as an economic 

consultant for the purpose of performing the CPUC Consulting Services on January 29, 2019, and 

memorialized this retention in the February 21, 2019 Letter (the “Supplemental Engagement 

Letter”).1 The CPUC Consulting Services have been and will continue to be performed by 

Compass at the direction of PG&E’s Law Department, and are thus subject to the protections of 

attorney-client privilege and the attorney work product doctrine. While such protections limit the 

extent to which Compass’ work may be disclosed or described, the CPUC Consulting Services 

related to the CPUC proceeding include the evaluation of methodologies for determining the 

appropriate level of wildfire costs that a utility should be required to pay pursuant to Public Utilities 

Code Section 451.2.2 Pursuant to the terms and conditions of the Supplemental Engagement 

Letter, the Debtors seek to continue to retain Compass, to serve as economic consultants to assist 

the PG&E Law Department by continuing to provide CPUC Consulting Services.3 As more fully 

set forth in the Application, by virtue of being a leading economic consulting firm with 

considerable experience providing economic and financial analysis services, and having expertise 

evaluating and assessing damages and losses in mass torts, Compass is well-qualified to provide 

the CPUC Consulting Services. 

 

1

 Compass was originally retained by Munger, Tulles & Olson LLP in November 2018 to perform 

the CPUC Consulting Services. This retention was superseded, as of the Petition Date, by the 

Debtors’ direct retention of Compass for the CPUC Consulting Services. 

2

 Public Utilities Code Section 451.2(b) requires the CPUC to “determine the maximum amount 

[an electrical] corporation can pay without harming ratepayers or materially impacting its ability 

to provide adequate and safe services.” 

3

 As set forth in the Application, Debtors had not previously filed a retention application for 

Compass because Debtors do not believe that Compass' post-petition work to date falls within the 

scope of section 327(a) of the Bankruptcy Code. However, in light of the Creditors Committee’s 

proposed retention of FTI, out of an abundance of caution and to preserve the Debtors' right to 

continue using Compass' services throughout the Chapter 11 Cases, the Debtors seek this Court's 

approval to retain Compass under section 327(a) of the Bankruptcy Code at this time. 

Case: 19-30088 Doc# 1842 Filed: 05/03/19 Entered: 05/03/19 17:26:11 Page 3 of

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The Debtors intend that the CPUC Consulting Services will complement or be entirely 

separate from, and not duplicate, the services being rendered by other professionals retained by or 

on behalf of Debtors in the Chapter 11 Cases. 

Debtors do not believe that Compass’ disinterestedness in the matter is in any way affected 

by nature of Compass’ provision of the CPUC Consulting Services. Debtors maintain their 

position that Compass does not have “an interest materially adverse to the interest of the state or 

of any class of creditors” and that it is a “disinterested person” as that term is defined in section 

101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. 

Subject to the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Bankruptcy 

Local Rules, the Fee Guidelines, and the Orders, the Debtors propose to compensate Compass as 

contemplated in the Supplemental Engagement Letter on an hourly basis. The hourly rates set 

forth below are Compass’ current applicable hourly rates for the work of its professionals and staff 

members for certain of the engagements set forth in the Supplemental Engagement Letter. These 

hourly rates reflect Compass’ normal and customary billing practices for engagements of this 

complexity and magnitude. Compass’ hourly rates are subject to periodic adjustment from time 

to time in accordance with Compass’ established billing practices and procedures. Compass will 

provide reasonable notice of any changes to its hourly rates to the Debtors and the U.S. Trustee. 

Compass Professional Hourly Fee 

Consultant $885-1,125 

Senior Professionals $700-975 

Professional Staff $580-685 

Research Staff $220-605 

Compass has agreed to a budget of $500,000 for calendar year 2019 for its CPUC 

Consulting Services. This amount represents the maximum, not the minimum, of the amounts that 

Case: 19-30088 Doc# 1842 Filed: 05/03/19 Entered: 05/03/19 17:26:11 Page 4 of

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Compass shall charge Debtors in connection with the CPUC Consulting Services in 2019. Any 

amounts that exceed this budgeted amount will require specific advance approval by Debtors and 

corresponding approval by this Court. 

Unless otherwise noted, all provisions from the Application apply to this Supplemented 

Application, including provisions governing the scope of services, Compass’ disinterestedness and 

professional compensation. 

WHEREFORE the Debtors respectfully request entry of an order granting (i) the relief 

requested herein as a sound exercise of the Debtors’ business judgment and in the best interests of 

their estates, creditors, shareholders, and all other parties interests, and (ii) such other and further 

relief as the Court may deem just and appropriate. 

Dated: May 3, 2019 

 CRAVATH, SWAINE & MOORE LLP 

KELLER & BENVENUTTI LLP 

By: /s/ Jane Kim_________________ 

 Jane Kim 

Attorneys for Debtors 

and Debtors in Possession 

Case: 19-30088 Doc# 1842 Filed: 05/03/19 Entered: 05/03/19 17:26:11 Page 5 of

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