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WEIL, GOTSHAL & MANGES LLP

Stephen Karotkin (pro hac vice)

(stephen.karotkin@weil.com)

Ray C. Schrock, P.C. (pro hac vice)

(ray.schrock@weil.com)

Jessica Liou (pro hac vice)

(jessica.liou@weil.com) 

Matthew Goren (pro hac vice)

(matthew.goren@weil.com)

767 Fifth Avenue

New York, NY 10153-0119

Tel: 212 310 8000

Fax: 212 310 8007

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,

Bankruptcy Case 

No. 19-30088 (DM)

Chapter 11

(Lead Case)

(Jointly Administered)

APPLICATION PURSUANT TO 11 U.S.C. §§

327(a) AND 328(a) AND FED. R. BANKR. P. 

2014(a) AND 2016 FOR AUTHORITY TO 

RETAIN AND EMPLOY KPMG LLP 

AS INFORMATION TECHNOLOGY, RISK,

AND LEGAL SUPPORT CONSULTANTS

TO THE DEBTORS NUNC PRO TUNC TO 

PETITION DATE

Date: June 11, 2019

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

Place: United States Bankruptcy Court

Courtroom 17, 16th Floor

San Francisco, CA 94102

Objection Deadline: June 4, 2019, 4:00 p.m. (PT)

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). 

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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 Application (the “Application”), 

pursuant to sections 327(a) and 328(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 KPMG LLP (“KPMG”) as information technology, risk, and legal 

support consultants for the Debtors effective as of the Petition Date (as defined below) in accordance 

with the terms and conditions set forth in the Engagement Agreements (as defined below). 

In support of this Application, the Debtors submit the Declaration of Geno Armstrong, a principal 

of KPMG (the “Armstrong Declaration”), filed concurrently herewith. Copies of the Engagement 

Agreements are annexed as exhibits to the Armstrong Declaration. A proposed form of order approving 

the retention and employment of KPMG is annexed hereto as Exhibit A (the “Proposed Order”).

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MEMORANDUM OF POINTS AND AUTHORITIES

I. JURISDICTION

The Court has jurisdiction to consider this matter pursuant to 28 U.S.C. §§ 157 and 1334, the 

Order Referring Bankruptcy Cases and Proceedings to Bankruptcy Judges, General Order 24 (N.D. 

Cal.), and Rule 5011-1(a) of the Bankruptcy Local Rules for the United States District Court for the 

Northern District of California (the “Bankruptcy Local Rules”). This is a core proceeding pursuant to 

28 U.S.C. § 157(b). Venue is proper before the Court pursuant to 28 U.S.C. §§ 1408 and 1409. 

II. BACKGROUND

On January 29, 2019 (the “Petition Date”), the Debtors commenced with the Court voluntary 

cases under chapter 11 of the Bankruptcy Code. The Debtors continue to operate their businesses and 

manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy

Code. No trustee or examiner has been appointed in either of the Chapter 11 Cases. The Debtors’ 

Chapter 11 Cases are being jointly administered for procedural purposes only pursuant to Bankruptcy 

Rule 1015(b).

On February 12, 2019, the United States Trustee (the “U.S. Trustee”) appointed an Official 

Committee of Unsecured Creditors (the “Creditors Committee”). On February 15, 2019, the U.S. 

Trustee appointed an Official Committee of Tort Claimants (the “Tort Claimants Committee” and, 

together with the Creditors Committee, the “Committees”).

Additional information regarding the circumstances leading to the commencement of the Chapter 

11 Cases and information regarding the Debtors’ businesses and capital structure is set forth in the 

Amended Declaration of Jason P. Wells in Support of the First Day Motions and Related Relief [Docket 

No. 263] (the “Wells Declaration”).

III. KPMG’S QUALIFICATIONS

KPMG is a firm of independent public accountants as defined under the Code of Professional 

Conduct of the American Institute of Certified Public Accountants. The Debtors have selected KPMG 

as their advisors because of the firm’s diverse experience and extensive knowledge in the fields of 

accounting, taxation, and operational controls for large sophisticated companies both in chapter 11 as 

well as outside of chapter 11.

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The Debtors have employed KPMG for at least six years. By virtue of its prior engagements, 

KPMG is familiar with the books, records, financial information and other data maintained by the 

Debtors and is qualified to continue to provide advisory services to the Debtors. As such, retaining 

KPMG is an efficient and cost effective measure in which the Debtors may obtain the requisite services

set forth herein.

IV. SCOPE OF SERVICES

The Debtors are proposing that KPMG be employed upon the terms and conditions set forth in 

(i) that certain Master Services Agreement dated as of January 17, 2017, attached to the Armstrong 

Declaration as Exhibit 1-A (together with the change order dated as of November 20, 2018, the “MSA”), 

and six distinct contracts by and between the Debtors and KPMG, attached to the Armstrong Declaration 

as Exhibits 1-B through 1-G (the “MSA Contracts” and, together with the MSA, the “Master Services 

Agreement”), and (ii) that certain engagement letter dated March 13, 2012, among KPMG, the Debtors, 

Latham & Watkins LLP (“Latham”) and Clarence Dyer & Cohen LLP (“Clarence”), attached to the 

Armstrong Declaration as Exhibit 1-H (the “Legal Support Services Agreement” and, together with 

the Master Services Agreement, the “Engagement Agreements”). Pursuant to the Engagement 

Agreements, KPMG will continue to provide information technology, risk, and legal support consulting

to the Debtors including, without limitation, the following services (the “Services”) each as more 

particularly described in the applicable designated agreements:

(i) Design enterprise project management tools (Oracle Primavera Unifier 

and SAP PPM applications) to establish a common, centralized and 

automated approach for effectively and efficiently managing capital 

project work (the “Enterprise Project Management Tools 

Implementation Services”, as described in Exhibit 1-B to the 

Armstrong Declaration);

(ii) Provide Debtors with a staff member to support the Debtors’ personnel 

with respect to their security initiatives: monitor budget; create and 

oversee schedules; track issues and risks; report to debtors’ management 

as requested (the “Risk Assessment Services”, as described in Exhibits 

1-C and 1-D to the Armstrong Declaration);

(iii) Assist the Debtors with their migration from Siteminder to Ping 

(information technology software platforms) (the “IT Software 

Services”) as described in Exhibit 1-E to the Armstrong Declaration);

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(iv) Provide support to the Debtors’ internal counsel in connection with 

Debtors’ development of certain aspects of its transmission, distribution 

and substation inspection programs (the “Asset Management Services”, 

as described in Exhibit 1–F to the Armstrong Declaration);

(v) Assist Debtors' team with the development of its Data Security program 

(the “Data Security Services”, as described in Exhibit 1-G to the 

Armstrong Declaration); and

(vi) Provide certain evidentiary support services at the request of Debtors’ 

counsel, Latham and Clarence (the “Legal Support Services”, as 

described in Exhibit 1-H to the Armstrong Declaration).

In addition to the foregoing, KPMG, at the request of the Debtors, may provide additional 

services deemed appropriate and necessary to benefit the Debtors’ estates. Should KPMG agree in its 

discretion to undertake any such matter, KPMG and the Debtors may enter into additional agreements 

and will seek separate retention orders with regard to any such additional agreements.

V. NO DUPLICATION OF SERVICES

The Debtors intend that the services of KPMG will complement, and not duplicate, the services 

being rendered by other professionals retained in these Chapter 11 Cases. KPMG understands that the 

Debtors have retained and may retain additional professionals during the term of the engagement. 

Specifically, the Debtors plan to retain PricewaterhouseCoopers LLP for distinct management, tax, 

internal accounting, and advisory services and Deloitte & Touche LLP as the Debtors’ independent 

auditor of their financial statements. KPMG will work cooperatively with such professionals to integrate 

any respective work conducted by the professionals on behalf of the Debtors. 

VI. KPMG’S DISINTERESTEDNESS

To the best of the Debtors’ knowledge, information, and belief, the members, partners, principals 

and professionals assigned to this case by KPMG do not have any connection with or any interest adverse 

to the Debtors, their creditors, or any other party in interest, except as may be set forth in the Armstrong

Declaration.

Based upon the Armstrong Declaration, the Debtors submit that KPMG 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. The Debtors have been informed that KPMG will conduct an ongoing 

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review of its files to ensure that no disqualifying circumstances arise. If any new relevant facts or 

relationships are discovered, KPMG will supplement its disclosure to the Court. 

In the ninety (90) days before the Petition Date, the Debtors paid KPMG $4,836,042.16 for 

services rendered. These advance payments have been applied on account of fees and expenses incurred 

in connection with prepetition services. KPMG has agreed to waive any unpaid prepetition fees or 

expenses. Accordingly, as of the Petition Date, KPMG does not hold a prepetition claim against the 

Debtors for amounts owed for services rendered.

1

VII. PROFESSIONAL COMPENSATION

As set forth in the Armstrong Declaration, KPMG will apply to the Court for allowances and 

reimbursement of expenses in accordance with the applicable provisions of the Bankruptcy Code, the 

Bankruptcy Rules, the Bankruptcy Local Rules, the United States Bankruptcy Court Northern District 

of California Guidelines for Compensation and Expense Reimbursement of Professionals and Trustees, 

effective February 19, 2014 (the “Local Guidelines”), the U.S. Trustee Guidelines for Reviewing 

Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. § 330 by 

Attorneys in Larger Chapter 11 Cases, effective November 1, 2013 (the “U.S. Trustee Guidelines,” 

and together with the Local Guidelines, the “Fee Guidelines”), the Order Pursuant to 11 U.S.C. §§ 331 

and 105(a) and Fed. R. Bankr. P. 2016 for Authority to Establish Procedures for Interim Compensation 

and Reimbursement of Expenses of Professionals [Docket No. 701], and any further Orders of the Court 

in these Chapter 11 Cases regarding professional compensation and reimbursement of expenses (the 

“Orders”).

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

Rules, the Fee Guidelines, and the Orders, the Debtors propose to compensate KPMG as contemplated 

in the Engagement Agreements on either an hourly or fixed-fee basis as described below. 

 1 KPMG received $115,000 payment on March 23, 2019 for prepetition hazardous substance mechanism 

work, an environmental cleanup program, in accordance with the Final Order Pursuant to 11 U.S.C. §§ 

105(a) 363(b), and 507(a)(7) and Fed. R. Bankr. P. 6003 and 6004 (i) Authorizing Debtors to (a) 

Maintain and Administer Customer Programs, Including Public Purpose Programs, and (b) Honor Any 

Prepetition Obligations Relating Thereto; and (ii) Authorizing Financial Institutions to Honor and 

Process Related Checks and Transfers [Docket No. 843] entered on March 12, 2019. 

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A. Fixed Fee Arrangements: 

The Debtors and KPMG have agreed to fixed-fee compensation for the Enterprise Project 

Management Tools Implementation Services. Payment of the fixed fee is dependent on an iterative 

process by which stages of the project go through a formal review, including a detailed walkthrough, 

modifications (if required) and formal acceptance. In addition, the fee estimates are based on the 

assumption that the Debtors will provide the information and assistance necessary for KPMG to 

complete each assignment. As of January 29, 2019, KPMG had received the following amounts pursuant 

to the MSA Contract for Services performed prepetition and will be seeking payment of the remainder 

of the fixed-fee after KPMG has completed the process of delivery, review and acceptance of the overall 

project.

Services Fixed-Fee

Amount

Fees Paid

Prepetition

Fees Sought

Postpetition

Enterprise Project Management Tools 

Implementation Services $2,071,8522 $716,994 $1,338,4443

The Debtors and KPMG have agreed to fixed-fee compensation for the Data Security Services. 

Payment of the fixed fee is dependent on an iterative process by which stages of the project go through 

a formal review, including a detailed walkthrough, modifications (if required) and formal acceptance. 

In addition, the fee estimates are based on the assumption that the Debtors will provide the information 

and assistance necessary for KPMG to complete each assignment.

Services Fixed-Fee

Amount

Fees Paid

Prepetition

Fees Sought

Post Petition

Data Security Services $2,705,013.50 $0 $2,705,013.50

 2 KPMG owes a minority-owned subcontractor $375,583 for certain services in connection with this 

project. Although the subcontractor is not expected to provide any substantial services for the 

bankruptcy estates, the subcontractor has affirmed to KPMG that it is a disinterested person under the 

Bankruptcy Code.

3 KPMG has reduced the fixed fee amount by $14,414 for a deliverable defined in the MSA Contract 

that was not completed by the project end date, and by a $2,000 credit on the invoices paid prior to the 

Petition Date. Of the unpaid fixed fee, $661,242 relates to steps of the project for which KPMG 

received formal acceptance prior to the Petition Date, but which are necessary for the completion of the 

overall project.

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B. Hourly Arrangements:

The hourly rates set forth below are KPMG’s applicable hourly rates for the work of its

professionals and staff members to be provided to the Debtors other than with respect to the fixed fee 

engagements described above. These hourly rates reflect KPMG’s normal and customary billing 

practices for engagements of this complexity and magnitude. KPMG’s hourly rates are subject to 

periodic adjustment and/or increase from time to time in accordance with KPMG’s established billing 

practices and procedures. The Debtors have agreed to compensate KPMG4 for professional services 

rendered at its normal and customary hourly rates, subject to the reductions discussed below. To the 

extent such hourly rates are increased, KPMG will provide reasonable notice of any changes to its hourly 

rates to the Debtors and the U.S. Trustee.

The hourly rates for Legal Support services regarding additional technical and advisory services 

to be rendered by KPMG and applicable herein are as follows:

 4 Appendix C of the Legal Support Services Agreement contains additional charges for data hosting 

(such as per user, document, image/page and gigabyte charges).

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Billing Category

Legal 

Support 

Services5

Third Party 

Risk 

Assessment 

Loaned 

Staff6

IT Software 

Services7

Asset 

Management 

Services8

Partner / Managing Director $595 N/A N/A $500/$475

Director $575 N/A N/A $435

Manager $475 N/A N/A $400

Senior Associate $375 $150 $225 $325

Associate $250 N/A N/A $275

Para Professional $100 N/A N/A N/A

Data Entry Clerk $75 N/A N/A N/A

Additionally, KPMG will invoice the Debtors for its reasonable out-of-pocket expenses charged 

during these Chapter 11 Cases, which include, among other things, telephone and other charges, mail 

and express mail charges, travel expenses, expenses for “working meals” and computerized research, 

applicable sales, use or value added tax, as well as non-ordinary costs such as secretarial and other 

overtime.

The Debtors understand it is not the practice of KPMG’s professionals to keep detailed time 

records in one-tenth-of-an-hour increments (i.e., six minute increments) as customarily kept by attorneys 

who are compensated subject to approval of the Bankruptcy Court. Instead, the customary practice of 

KPMG’s professionals is to keep reasonably detailed records of services rendered during the course of 

an engagement in half-hour (0.5) increments. Thus, KPMG requests that this Court allow KPMG’s 

professionals to provide the following in its monthly, interim, and final fee applications: (a) a narrative 

 5 The majority of fees to be charged for Legal Support Services regarding additional technical and 

advisory services reflect a reduction of approximately 30% - 38% from KPMG’s normal and 

customary rates, depending on the types of services to be rendered.

6 The majority of fees to be charged in the Third Party Risk Assessment Program Loaned Staff 

engagement reflect a reduction of approximately 78% from KPMG’s normal and customary rates, 

depending on the types of services to be rendered. The services are billed to a cap of $378,000. The 

Engagement Agreement includes a total estimated amount of fees to be charged for the applicable 

services. Any such amount is an estimate and may be subject to increase or decrease.

7 The majority of fees to be charged in the IT Software Services engagement reflect a reduction of 

approximately 69% - 73% from KPMG’s normal and customary rates, depending on the types of 

services to be rendered. The services are billed to a cap of $228,690.00.

8 The majority of fees to be charged for Asset Management Services regarding additional technical and 

advisory services reflect a reduction of approximately 29%-53% from KPMG’s normal and customary 

rates, depending on the types of services to be rendered and the services are billed at a cap of 

$4,200,000.

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summarizing each project category and the services rendered under each project category; (b) as an 

exhibit to each monthly, interim, and final fee application that KPMG files in these Chapter 11 Cases, a 

summary, by project category, of services rendered to the Debtors, which identifies each professional 

rendering services, the number of hours expended by each professional, and the amount of compensation 

requested with respect to the services rendered by each professional; and (c) reasonably detailed records 

of time in half-hour (0.5) increments, describing the services rendered by each professional and the 

amount of time spent on each date.

The Debtors respectfully submit that KPMG’s rates and policies stated in the Armstrong

Declaration are reasonable, particularly given the nature of these Chapter 11 Cases. 

VIII. INDEMNIFICATION

As part of the overall compensation payable to KPMG, the Debtors agreed to certain 

indemnification obligations as described in the Engagement Agreements. The terms of the Engagement

Agreements and the indemnification provisions were fully negotiated at arm’s length. During the 

pendency of the Debtors’ Chapter 11 Cases, the Debtors seek the modification of the following terms 

described in the Engagement Agreements: 

(a) KPMG shall not be entitled to indemnification, contribution or reimbursement for 

services other than those described in the Engagement Agreements and the 

Application, unless such services and indemnification therefor are approved by 

the Court;

(b) The Debtors shall have no obligation to indemnify KPMG, or provide 

contribution or reimbursement to KPMG, for any claim or expense that is either: 

(i) judicially determined (the determination having become final) to have arisen 

from KPMG's bad faith, self-dealing, breach of fiduciary duty (if any such duty 

exists), gross negligence or willful misconduct; or (ii) judicially determined (the 

determination having become final), based on a breach of KPMG's contractual 

obligations to the Debtor; or (iii) settled prior to a judicial determination as to the 

exclusions set forth in clauses (i) and (ii) immediately above, but determined by 

the Court, after notice and a hearing to be a claim or expense for which KPMG 

should not receive indemnity, contribution or reimbursement under the terms of 

KPMG's retention by the Debtors pursuant to the terms of the Engagement 

Agreements and Application, as modified by the Proposed Order; and

(c) If, before the earlier of: (i) the entry of an order confirming a chapter 11 plan in 

these Chapter 11 Cases (that order having become a final order no longer subject 

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to appeal); and (ii) the entry of an order closing these Chapter 11 Cases, KPMG 

believes that it is entitled to the payment of any amounts by the Debtors on 

account of the Debtors' indemnification, contribution and/or reimbursement 

obligations under the Engagement Agreements (as modified by the Proposed 

Order) and Application, including without limitation the advancement of defense 

costs, KPMG must file an application therefor in this Court, and the Debtors may 

not pay any such amounts to KPMG before the entry of an order by this Court 

approving the payment. This subparagraph (c) is intended only to specify the 

period of time under which the Court shall have jurisdiction over any request for 

fees and expenses by KPMG for indemnification, contribution or reimbursement, 

and not a provision limiting the duration of the Debtors' obligation to indemnify 

KPMG. All parties in interest shall retain the right to object to any demand by 

KPMG for indemnification, contribution or reimbursement.

The following changes to the Engagement Agreements apply during the pendency of the Debtors’ 

Chapter 11 Cases:

(a) Paragraph 29 of the Master Services Agreement, which provides for limitation 

of liability between KPMG and the Debtors, is deleted.

(b) Paragraph 6 of the standard terms and conditions in the Legal Support Services 

Agreement, which provides for limitation on damages between KPMG and the 

Debtors, is deleted. 

IX. BASIS FOR RELIEF REQUESTED

The Debtors seek authority to employ and retain KPMG as its information technology, risk and 

legal support consultants under section 327 of the Bankruptcy Code, which provides that a debtor is 

authorized to employ professional persons “that do not hold or represent an interest adverse to the estate, 

and that are disinterested persons, to represent or assist the [debtors] in carrying out the [debtors’] duties 

under this title.” 11 U.S.C. § 327(a). Section 1107(b) of the Bankruptcy Code elaborates upon sections 

101(14) and 327(a) of the Bankruptcy Code in cases under chapter 11 of the Bankruptcy Code and 

provides that “a person is not disqualified for employment under section 327 of [the Bankruptcy Code] 

by a debtor in possession solely because of such person’s employment by or representation of the debtor

before the commencement of the case.” 11 U.S.C. § 1107(b).

The Debtors further seek approval of the fixed-fee portion of the engagement pursuant to section 

328(a) of the Bankruptcy Code, which provides, in relevant part, that the Debtors, “with the court’s 

approval, may employ or authorize the employment of a professional person under section 327 . . . on 

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any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, on a 

fixed or percentage fee basis, or on a contingent fee basis.” 11 U.S.C. § 328(a). Accordingly, section 

328 of the Bankruptcy Code permits the compensation of professionals on flexible terms that reflect the 

nature of their services and market conditions. The Debtors believe that the fixed-fee portion of the 

engagement provides for reasonable terms and conditions of employment, comparable to other leading 

audit firms and, thus, should be approved under section 328(a) of the Bankruptcy Code (except that the 

U.S. Trustee may review such compensation under sections 330 and 331 of the Bankruptcy Code). 

Accordingly, the Debtors submit that the relief requested in this Application is in the best interests of the 

Debtors’ estates, creditors, and all parties in interest to these Chapter 11 Cases.

X. NOTICE

Notice of this Application will be provided to (i) the Office of the United States Trustee for 

Region 17 (Attn: Andrew R. Vara, Esq. and Timothy Laffredi, Esq.); (ii) counsel to the Creditors 

Committee; (iii) counsel to Tort Claimants Committee; (iv) the Securities and Exchange Commission; 

(v) the Internal Revenue Service; (vi) the Office of the California Attorney General; (vii) the California 

Public Utilities Commission; (viii) the Nuclear Regulatory Commission; (ix) the Federal Energy 

Regulatory Commission; (x) the Office of the United States Attorney for the Northern District of 

California; (xi) counsel for the agent under the Debtors’ debtor in possession financing facility; and (xii) 

those persons who have formally appeared in these Chapter 11 Cases and requested service pursuant to 

Bankruptcy Rule 2002. The Debtors respectfully submit that no further notice is required.

No previous request for the relief sought herein has been made by the Debtors to this or any other 

Court.

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Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153-0119

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 21, 2019 

WEIL, GOTSHAL & MANGES LLP

KELLER & BENVENUTTI LLP 

By: /s/ Stephen Karotkin

Stephen Karotkin 

Attorneys for Debtors

and Debtors in Possession 

Case: 19-30088 Doc# 2171 Filed: 05/21/19 Entered: 05/21/19 16:55:41 Page 13

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