I 

pwc 

o Identify interiml I working leadership team 

• Detail forjjj^HBcey operating model aspects via facilitated workshops per function, 

including the following: 

o Role of Corporate/BUs/shared services 

o Leadership & governance roles 

o Decision rights (Policies, Processes, KPIs) 

o Measurement 

o Culture and key behavioral changes 

o Determine interfaces/linkages with other departments necessaiy for future state 

^responsibilities 

• Determine strategies to eliminataMrotentialstrandedcoi ts and achieve target cost 

structure for PG&E (including^^H^|^^H|^^H^H^K)ptions needed to retain 

• Develop Interim and End-Stati 

• Execute 

roadmap; 

right before 

Finance Workstream: Financial Due Diligence 

General: Business. Financial Reporting, and ICeu Accounting Policies 

• Gain an understanding of the Company's significant accounting policies and their 

application, including revenue recognition, subjective reserves, and other policies 

deemed critical by management; 

• Prepare an analysis to bridge (i) the reported results to 

financial statements and (a) management's fi 

financial statements, if applicable; 

management's 

nancial statements 

• Discuss with the Company's management to gain an understanding of significant 

contracts and agreements in order to identify and comment on potential issues arisir 

as a result of the proposed|^^H| e.gj 

and terms that may impact required worlun^apTfalT 

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pwc 

Provide a high level overview of the relevant regulatory environment specific to rate 

malting; 

Understand the nature of the Company s significant ven ior relationships and key 

contract terms including pridnaconsiderations, commitments, volume commitments / 

discounts, payment terms, ^H^H^^^Hprovisions and other non-standard terms; 

• Understand any related party transactions, including re; il estate leasing arrangements, 

sales to related parties, and shareholder loans; 

• For any entity engaged in the construction of utility-like assets (transmission, power 

generation, etc.), provide a detail of the purpose of the entity, capital expenditure 

budget, amounts incurred to date and an estimate to complete; and 

• Understand functions / services provided to 

other related parties, if any vs. business 

o Back office 

o Infrastructure 

o 

o Benefit and insurance programs 

Historical Financial Results I 

! 

• Quality of Earnings analysis: Prepare a quality of earnings analysis to analyze historical 

underlying normalized EBITDA, including but not limited to an assessment of the 

impact oft 

o EBITDA adjustments proposed by management:, if any 

o Pro forma considerations 

o The impact of unusual, non-recurring and non-operational revenues or costs 

i 

o Reserve reversals 

t 

o Non-cash expenses 

o Out of period revenues or expenses 

J. 

o Impact of significant changes in accounting policies 

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pwc 

o Restructuring and asset impairments, if any 

o Related party and owner expenses 

Other Key Financial and Business Analysis for the purposes of identifying any further 

potential impact to historical quality of earnings, we will perform the following: 

o At a high level, understand and analyze historical Key Performance Indicators 

(KPI's) such as revenue/cost per megawatt produced; 

o Analyze trends in monthly working capital and turnover ratios, including days 

sales outstanding, days inventory on hand and qays payable outstanding; 

o Analyze and understand changes in the Company's balance sheet accounts with 

a focus on potential areas that would im ipact thej Company's run-rate EBITDA; 

Analyze high-level historical revenues and gross, profit trend; 

Analyze the impacts of seasonality on monthly trends, including revenues and 

profitability; 

- Analyze cost structure (fixed versus variable, dii ect versus allocated, employee 

costs, etc.); 

Obtain and analyze historical general and administrative expenses with 

emphasis on unusual fluctuations; 

Analyze the Company's other income/expenses with focus on inquiry regarding 

trends and unusual relationships; and 

Analyze historical and management's planned capital expenditures, with a focus 

on growth versus maintenance expenditures, and understand any commitments 

with respect to capital expenditures. 

Working Capital Analusis 

• Prepare a detailed analysis of monthly working capital; 

| 

• Analyze the trends for key working capital accounts andjidentify the drivers; 

• Identify one-time and non-recurring adjustments to present working capital on a 

'normalized' basis for the trailing twelve-month Period; ^nd 

10 

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pwc 

• Analyze the following metrics: DSO, DPO, and worldng capital as a percentage of trailing 

net sales for the most recent available interim period. 

Debt and Debt-like Analysis 

• Identify balance sheet accounts that represent unusual or significant near term cash 

outflows; 

• Identify balances and other commitments that exhibit dbbt-like characteristics, such as 

loss contracts, advance customer payments, billings in excess of costs, litigation, 

environmental liabilities, purchase commitments etc.; 

; 

J 

• Note non-working capital items that could be considered debt or debt-like specific to the 

business, including: 

i 

o Reported debt; 

i i 

o Unwanted/unfavorable lease obligations; 

o Decommissioning liabilities & asset retirement, obligations; 

o Deferred or committed capital expenditures; 

o Employment agreements; 

o costs; 

o Known legal contingencies; and 

i 

o Off-balance sheet liabilities (guarantees, lettersiof credit, hedge contracts, etc.) 

Optional Services j 

We are able to provide the following services as part of the contemplated| 

services are not included in our fee estimates. 

• Advise on the structure and contents of the dataroom; 

Fees for these 

• Prepare dataroom schedules for your consideration; 

• Assist with the financial inputs of the teaser, informatiok memorandum, management 

presentations, etc. and perform moclc management presentations with key members of 

Company management; 

II 

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pwc 

Assist in development of responses to 

Comganyii 

Jiiligi 

Read and provide comments on 

Assist the Co 

advisor in 

jany in answering^ 

jence sessions; 

ata requests; 

I 

question and participate as your diligence 

Advise you on 

and 

Provide post-closing assistance for 

echanisms; 

Deliverables 

PwCs reporting to Client will include oral advice and various written outlines, executive summaries, 

presentations, memoranda, analysis of issues, and schedules prepared for and delivered to Client in 

connection with the Services (collectively, "Deliverables"). The Financial Due Diligence Services may 

also include a written report(s) setting forth the significant matters that came to PwC's attention. 

Upon full payment, Client will own all Deliverables prepared for and delivered to it in connection 

with the Services and will have a nonexclusive, non-transferable license to use the embedded PwC 

Materials (defined below) as part of such Deliverables. PwC will own its working papers, pre-existing 

materials and software, as well as any general skills, know-how, processes, methodologies, tools, 

techniques or other intellectual property (including a non-Client Specific version of any Deliverables) 

which PwC may have discovered or created as a result of the Services (collectively, "PwC Materials"). 

Preliminary advice and draft Deliverables are works in progress ahd Client should not rely on these 

until PwC confirms its advice or provides Client with a final Deliverable. 

Other than Deliverables, if requested, PwC may provide to Client spreadsheets, electronic materials, 

software, databases and other tools prepared by PwC to assist it with the engagement. If PwC makes 

these available to Client, they are provided "as is". PwC will not bk responsible for results obtained 

by anyone other than PwC from the use of those items. 

Other Terms 

PwC Technology 

! * 

PwC may provide or otherwise make available certain Materials that are not Deliverables, including 

spreadsheets and hosted web-based, data analytics, internet, cloud, visualization or other tools or 

software used to provide the Services or deliver the Deliverables (qollectively, the "PwC Technology"). 

If PwC Technology is provided or otherwise made available, PwC hereby grants to Client a non12 

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pwc 

exclusive, non-transferable license to use PwC Technology in accordance with PwC's instructions for 

Client's internal use and benefit only and solely in connection with and during the term of PwCs 

performance of the Services. PwC Technology is provided on an ''as is" and "as-available" basis, and 

PwC does not represent or warrant that PwC Technology or any content therein will be uninterrupted 

or error free or that it will provide useful, accurate or specific information or results. PwC Technology 

is subject to change without notice and PwC may change the functionality of, or suspend or 

discontinue access to, all or any portion of PwC Technology at any time without notice. PwC 

Technology and all Materials contained therein, are PwC's Confidential Information. PwC 

Technology, and information contained therein are not intended! to be Client's permanent records 

and, unless otherwise agreed in writing, access to PwC Technology and such information terminates 

upon expiration, completion or termination of the Services. PwC will, in its discretion, make data and 

records that are directly connected with the provision of the Services available to Client via PwC 

Technology. Client is responsible for separately maintaining copies of any relevant data and records 

made available through PwC Technology that Client may need. Client will provide PwC with written 

confirmation (by email or otherwise) of the names and employer! email addresses of those users that 

Client authorizes to access and use PwC Technology on Client's behalf (the "Client Users") and Client 

will promptly notify PwC in writing of any changes thereto. Client shall only authorize Client Users to 

use and access the PwC Technology in accordance with and subject to the same restrictions set forth 

above in the Use and Disclosure of Deliverables section that apply to Deliverables. Client is 

responsible and li'able for all Client Users' access to PwC Technology. Client shall not (and shall not 

allow any Client User to) misappropriate, infringe, reverse engineer, decompile, disassemble, or 

otherwise attempt to derive the source code, techniques, processes, algorithms, know-how, 

processes, formulae, methodologies, or other information or any of PwC's rights in PwC Technology, 

or otherwise use or access PwC Technology other than expressly permitted herein. "Materials" means 

information, know-how, data, and other technology, including works of authorship and other 

creations and ideas, databases, compilations, inventions, developments, software, firmware, and 

other computer programs (in source code, object code, or any other format), documentation, 

technical information, specifications, configuration information, designs, plans, drawings, writings, 

schematics, documents, reports, methods, procedures, concepts, techniques, protocols, systems, 

elements, components, subsystems, devices, equipment and other hardware. 

Notwithstanding any other provision of this agreement, PwC andjthe Other PwC Firms may use 

Confidential Information received hereunder, including tax return information, to develop, enhance, 

modify and improve technologies, tools, methodologies, services and offerings, and/or for 

development or performance of data analysis or other insight generation. Information developed in 

connection with these purposes may be used or disclosed to you or current or prospective clients to 

provide them services or offerings. PwC and the Other PwC Firms will not use or disclose the 

Confidential Information in a way that would permit Client to be identified by third parties without 

Client's consent. 

With respect to tax return information, Client may request in writing a more limited use and 

disclosure than the foregoing. The foregoing consent is valid until, further notice by Client. 

13 I 

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pwc 

Fees and Other Matters 

Based on our understanding of the Company's anticipated timin 

professional fees for the period ending March 31st, 2019 to be as 

December 2018 

January 2019 

February 2019 

March 2019 

$.7M to $i.oM 

$l.6M to $2.3M 

$1.8M to $2.5M 

$i.7M to $2.4M 

5 and priorities, we estimate 

follows: 

These ranges reflect the current Company priorities of initiating the separation management office, 

operational, and financial workstr earns. We have also considered the level of Company resources 

identified to support the effort as an input into the PwC resources required. 

The table below reflects the weekly and monthly range by identifii 

time. We will update the Company regularly if our estimated fees 

monthly ranges identified above. 

ied worlcstream and anticipated start 

are expected to be exceed the 

•.stream- ' * 

,* . " » * 1 

.Estimated-' 

.Average . 

• WeeWy v 

Fee Range 

* 1 ' i 

.Estimated 

'• PwC' 

1 resources 

* * * • * " 

; December ; 

2018 • 

' i 

* . .» 

' -Ji 

.... . F • 

inuavy 

2019 . 

,. "February. 

'• ..2019 : ' 

• 

I March ;, 

,2019 - ' . 

PMO $70,000 -

$90,000 per 

week 

3-5104.5 

resources 

$210,000-

$270,000 

$245,000-

$315,000 

1 

$245,000­

315,000 

$245,000-

$315,000 

Operational: 

HR 

Requirements 

$30,000-

$60,000 per 

week 

2.0 to 3.5 

resources 

$]jo,ooo-

$90,000 1 

$120,000-

$240,000 

$120,000-

$240,000 

Operational: 

Pension 

Requirements 

$10,000-

$20,000 per 

week 

0.5 to 1.0 

resources 

$30,000-

$60,000 

$40,000-

$80,000 

1 

$40,000-

$80,000 

$40,000-

$80,000 

Operational: 

Functional 

Requirements 

(e.g, IT, CRESS 

etc.) 

$75,000 -

$105,000 per 

week 

4-5 to 5 

resources 

$225,000-

$315,000 

1 

1 

$300,000-

$420,000 

$300,000-

$420,000 

Financial: 

Accounting & 

Reporting 

$145,000 -

$170,000 per 

week 

7.0 to 9,0 

resources 

$385,000 -

$475,000 

$700,000 -

$850,000 

! 

$700,000-

$850,000 

$630,000 -

$750,000 

Tax $7,500 - 1 to 2.5 $22,500 $30,000 

: 

$30,000 $30,000-

14 

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pwc 

•V^oi'Ic- '•' . • 

stream . 

'Estimated 

AverageWeekly" ' 

Fee-Range 

Estimated 

PwC. • • 

resource 

December'1 

2018 . 

January'. . 

! 2019 

. February 

" . 2019 ' 

• " I * \ ^ „ . 

' March 

2019 _ 

$15,000 per 

week 

resources -$45,ooo -$60,000 -$60,000 $60,000 

Operational: 

Target 

Operating 

Model 

$20,000 -

$55,000 per 

week 

1 to 2.5 

resources 

$60,000-

$165,000 

$80,000-

$220,000 

$80,000-

$220,000 

$80,000-

$220,000 

Financial: 

Financial 

Diligence 

$70,000 -

$90,000 per 

week 

3-5 to 4-5 

resources 

" $245,000-

$315,000 

1 

$245,000­

315,000 

$245,000-

$315,000 

Total Estimated Forecast by month $.7M to 

91.0M 

$1.6M to $2.3M 

1 

$1.8M to $2,5M $i.7M to $2.4M 

If, during the course of performing these Services, it appears that the fee will exceed the estimate, 

PwC will advise Client promptly and will not undertake additional Services without prior approval. 

PwC will also bill Client for out-of-pocket expenses, any applicable sales, use or value added tax, and 

PwC's internal per-ticket charges for booking travel. 

**•»** 

15 

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Except as set forth above in this addendum, all other terms and tonditions of the Engagement Letter 

shall remain in full force and effect I 

This addendum may be executed in counterparts, each of which shall be deemed an original, but all 

of which taken together shall constitute one single document between the parties. Counterparts may 

be exchanged by facsimile, or attached as a pdf, jpeg, or similar file type to an email. 

If Client has any questions, please contact Morris (Morry) Jones at +1 (415) 498-6423 or 

morris.n.iones@us.pwc.com. If the Services and this addendum are acceptable, please sign a copy of 

this agreement below and return it to the undersigned. 

Very truly yours, 

PricewaterhouseCoopers LLP 

By: 

Morris (Mqjffy) Jones 

Partner 

Date: \% 

ACCEPTED AND AGREED: 

Pacific Gas and Electric Company 

Signature of client official: 

Please print name: 

Title: 

Date: I±FI±FJL 

16 

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PG&E BILLING REQUIREMENTS AND PROCEDURES 

Billing Requirements: 

1. We agree to reimburse you for your out-of-pocket expenses at your actual net 

cost. All disbursements (including lodging, travel, out-of-pocket copying service, 

transcripts, and the like) must be included with your statements with supporting 

documentation for all lodging and travel expenses (other than nominal amounts) 

and for each individual item the cost of which is $75100 or greater. 

2. All expenses shall be reasonable, ordinary, actual net cost incurred and paid by 

you. All expenses shall be billed at cost. Please note that air travel must be at 

coach rates and all rental car costs must be at subcorhpact rates unless otherwise 

expressly authorized in writing. We agree that expenses for lodging, meals, and 

transportation shall be at reasonable rates and that you will exercise prudence in 

incurring such expenses. Mileage will be paid at the Liternal Revenue Service's 

current year approved standard rate. 

J 

3. Normal overheads shall be considered a bundled component of your hourly fees 

and not charged or invoiced to PG&E. If any such charge appeal's, we will 

automatically deduct it from your invoice. Normal cjverheads for purposes of this 

Contract are secretarial services, administrative, library services, clerical support, 

office supplies, postage, routine office copying, telecopying or "fax," local 

telephone, filing, file indexing, bill preparation, staffj overtime, word processing, 

and meals or snacks (unless while travelling or otherwise approved in advance). 

i 

4. When photocopying jobs, other than routine office copying, are required, you 

must use the least expensive service available. In any event, we will pay no more 

than $0.10 per page other than for unusually sized documents or color 

photocopying. Any job, whether by you, a vendor, cjr a service, exceeding $1,000 

requires advance approval confirmed in writing. 

5. Travel time shall not be considered as actual time worked unless approved, in 

advance, by the principal PG&E attorney assigned to the matter. In the event you 

or your employee works during travel time, such efforts shall not be considered 

travel time for the puipose of this Contract. Air travel time shall be billed at onehalf the hourly rate of straight time rates unless you work during air travel. 

I 

Billing Procedures: 

In order to process your statements, PG&E must have the following information 

with every monthly statement: 

1. A cover summary sheet on vour letterhead that includes: 

I 

• Your remittance address if different than your letterhead address; 

i 

• Your taxpayer ED number; 

Case: 19-30088 Doc# 1792-23 Filed: 05/01/19 Entered: 05/01/19 17:47:02 Page

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• The case or matter name; , 

i 

• The calendar period covered by the statement; and, 

t 

• A summary statement of the professional fees and disbursements together 

with the invoice total. 

2. A separate statement of supporting detail on Vour letterhead with: 

! 

• The case or matter name; 

• Name and job title (e.g., paralegal) of each worker on each date work is done; 

i 

• Time worked on each date work is done, separated by function; 

i 

• Description of work done on each date; 

• Hourly rates for each worker; 

• Disbursements; 

I 

! 

• Total amount billed; and, i 1 I 

• Display your approved annual budget and how much you have spent to date 

for the current calendar year, and how much you have spent on a cumulative 

basis since work began. 

3. Additional materials to include with vour statement: 

i i 

• You should include as disbursements your actual out-of-pocket payments 

made to outside entities. Please remember that you must obtain authorization 

in advance of hiring experts/consultants. 

t 

• You should attach receipts or other documentation for individual items costing 

$75 or greater, including photocopying and lodging. 

i 

I 

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il 

SAMPLE BILLING STATEMENT 

Sample Cover Sheet II 

Your Firm Name 

411 Main Avenue 

City, CA 91234-5678 

[Remittance address, if different than above.] 

! Taxpayer ID: 94-0987654 

September 1,2016 

Pacific Gas & Electric Company 

P.O. Box 7133 

San Francisco, CA 94120 i 

Re: ABC v. PG&E 

I 

For professional services rendered during the period from August 1,2016, to 

August 31,2016. 

Professional Fees ; $187.50 

Expenses 50.00 

I 

Total $237.50 f 

i 

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Your Firm Name 

411 Main Avenue 

City, CA 91234-5678 

Taxpayer ID: 94-0987654 

| j 

I 

STATEMENT 

TO: Pacific Gas and Electric Company 

i 

RE: ABC v. PG&E 

Date Employee Title Services Rendered 

i 

8/5/16 Jane Doe Partner Prepare for hearing j 

i 

i 

I 

Disbursements: 

C&D Blueprint Service—depo transcript exhibits for 

7/15/16 depo 

Hour Rate Amount 

1.5 $125 $187.50 

Subtotal $187.50 

$50.00 

Subtotal $50.00 

TOTAL $237.50 

2016 Budget $2,500.00 

2016 Amount billed to date 

Total amount billed to date 

DUE AND PAYABLE UPON RECEIPT 

237.50 

$3,237.60 

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