INTERIM ORDER HONORING PREPETITION 

OBLIGATIONS TO EXCHANGE OPERATORS 

 Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153-0119

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WEIL, GOTSHAL & MANGES LLP 

Stephen Karotkin (pro hac vice) 

(stephen.karotkin@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 

Proposed 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.

Case Nos. 19 - 30088 (DM) 

 19 - 30089 (DM) 

Chapter 11 

INTERIM ORDER PURSUANT TO 11 U.S.C. 

§§ 105, 362, 363, AND 364 AND FED. R. BANKR. P. 

6003 AND 6004 AUTHORIZING DEBTORS TO 

(A) HONOR PREPETITION OBLIGATIONS TO 

NATURAL GAS AND ELECTRICITY EXCHANGE 

OPERATORS, (B) GRANT ADMINISTRATIVE 

EXPENSE CLAIMS AND AUTHORIZE POSTING 

OF COLLATERAL TO EXCHANGE OPERATORS, 

TRADING COUNTERPARTIES, AND FUTURE 

COMMISSION MERCHANTS, (C) MODIFY THE 

AUTOMATIC STAY, AND (D) GRANT RELATED 

RELIEF

□ Affects PG& Corporation 

□ Affects Pacific Gas and Electric 

 Company 

□ Affects both Debtors 

* All papers shall be filed in the Lead 

Case, No. 19-30088 (DM).

Signed and Filed: January 31, 2019

________________________________________

DENNIS MONTALI

U.S. Bankruptcy Judge

Entered on Docket 

January 31, 2019

EDWARD J. EMMONS, CLERK 

U.S. BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA

Case: 19-30088 Doc# 215 Filed: 01/31/19 Entered: 01/31/19 18:53:20 Page 1 of 6
INTERIM ORDER HONORING PREPETITION 

OBLIGATIONS TO EXCHANGE OPERATORS 

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Upon the Motion, dated January 29, 2019 (the “Motion”),1 of 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”), pursuant to sections 105, 362, 363, and 364 of title 11 of the United States Code 

(the “Bankruptcy Code”) and Rules 6003 and 6004 of the Federal Rules of Bankruptcy Procedure 

(the “Bankruptcy Rules”), for interim and final authority to (i) pay all outstanding Prepetition Exchange 

Obligations owed to the Exchange Operators, under those certain Prepetition Exchange Agreements, in 

the ordinary course as they come due, (ii) provide the Exchange Operators with administrative expense 

claims on account of all Postpetition Exchange Obligations, (iii) confirm the existing liens and security 

interests of the Exchange Operators in their collateral and authorize the Utility to pledge additional 

collateral to the Exchange Operators in the form of cash, letters of credit and/or other forms of collateral 

acceptable to the parties on account of all Exchange Obligations, (iv) permit the Trading Counterparties 

to apply existing cash collateral to their prepetition obligations and authorize the Utility to provide cash 

collateral for postpetition obligations to Trading Counterparties, (v) provide cash or other collateral to 

the Future Commission Merchants, and (vi) modify the automatic stay under section 362 of the 

Bankruptcy Code to the extent necessary to allow the (A) Exchange Operators to exercise the Trade 

Setoff and to apply collateral and the proceeds thereof and settle transactions, whether undertaken with 

respect to collateral or obligations that arose, and whether such collateral and proceeds were posted or 

arose, prior to or after the Petition Date, and, upon default, exercise their rights, in each case under and 

in accordance with the terms of the agreements and tariffs that govern the relationship between the 

Exchange Operators and the Utility, and (B) Trading Counterparties to exercise any valid right to setoff, 

settle or recoup any mutual obligations owing by the Utility to such Trading Counterparties, and to apply 

cash collateral to prepetition obligations, notwithstanding any limits otherwise imposed by section 553 

of the Bankruptcy Code, and (vii) grant related relief, all as more fully set forth in the Motion; and this 

Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. 

§§ 157 and 1334, the Order Referring Bankruptcy Cases and Proceedings to Bankruptcy Judges, 

 

1

 Capitalized terms used but not otherwise herein defined shall have the meanings ascribed to such terms 

in the Motion. 

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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”); and consideration 

of the Motion and the requested relief being a core proceeding pursuant to 28 U.S.C. § 157(b); and venue 

being proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; and the Court having found and 

determined that notice of the Motion as provided to the parties listed therein is reasonable and sufficient 

under the circumstances, and it appearing that no other or further notice need be provided; and this Court 

having reviewed the Motion and the Wells Declaration; and this Court having held a hearing on the 

Motion; and this Court having determined that the legal and factual bases set forth in the Motion establish 

just cause for the relief granted herein; and it appearing that the relief requested in the Motion is 

necessary to avoid immediate and irreparable harm to the Debtors and their estates as contemplated by 

Bankruptcy Rule 6003, and is in the best interests of the Debtors, their estates, creditors, shareholders, 

and all parties in interest; and upon all of the proceedings had before this Court and after due deliberation 

and sufficient cause appearing therefor, 

IT IS HEREBY ORDERED THAT: 

1. The Motion is granted on an interim basis, as provided herein. 

2. The Utility is authorized, but not directed, to pay or otherwise satisfy all Exchange 

Obligations owing to the Exchange Operators pursuant to the Prepetition Exchange Agreements in the 

ordinary course and consistent with such parties’ prepetition practices including the payment of any 

Prepetition Exchange Obligations (taking into account all authorized and available setoffs or netting, 

and all applications of Exchange Collateral, as authorized or provided for under the Prepetition 

Exchange Agreements), without regard to whether such obligations accrued or became due and owing, 

and without regard to whether such Exchange Collateral was posted, prior to, on, or following, the 

Petition Date. 

3. All postpetition transactions and obligations between the Utility and the Exchange 

Operators shall be made or withheld and undertaken in accordance with the terms of the Prepetition 

Exchange Agreements and all postpetition invoices shall be paid in accordance with the terms of the 

applicable Prepetition Exchange Agreement (taking into account all authorized and available setoffs or 

netting and other rights as authorized or provided for under the Prepetition Exchange Agreements). 

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4. The Exchange Operators shall be entitled to receive and retain existing Exchange 

Collateral and demand additional Exchange Collateral, and the Utility shall be authorized to post any 

and all cash and other forms of credit support and financial security authorized under or approved by 

the applicable Prepetition Exchange Agreements, or as otherwise mutually agreed to by the Utility and 

the Exchange Operators, and the Utility shall be authorized to prepay Exchange Obligations. All such 

cash and other forms of credit support and financial security and all proceeds thereof shall be considered 

Exchange Collateral for purposes of this Interim Order. For the avoidance of doubt, the total Exchange 

Collateral posted in favor of the Exchange Operators will include Exchange Collateral provided by the 

Utility to the Exchange Operators prior to and following the Petition Date. Requests for financial 

security in excess of the amounts required by or under the applicable Prepetition Exchange Agreement 

shall be processed, and excess amounts of collateral returned to the Utility, in accordance with the terms 

set forth therein. To the extent not otherwise effected in any Prepetition Exchange Agreement, the 

Exchange Operators are hereby granted, and shall have, pursuant to section 364(c)(2) and/or section 

364(d) of the Bankruptcy Code, as applicable, first-priority liens on and security interests in all Exchange 

Collateral previously or hereafter provided to them in accordance with the Prepetition Exchange 

Agreements, and the creation, perfection, and priority of such liens and security interests shall not 

require any further action of the Exchange Operators or any other person or entity and shall not be 

impaired or otherwise affected by any existing liens or security interests of any other person or entity or 

by any debtor-in-possession financing obtained by the Utility, any rights granted to any lender, agent, 

or other secured party in connection with any debtor-in-possession financing, or any order of the Court 

in connection with any debtor-in-possession financing. 

5. The Exchange Operators shall have an Administrative Expense Claim in the Chapter 11 

Cases under section 507(a) of the Bankruptcy Code for all Postpetition Exchange Obligations. 

6. For the avoidance of doubt, the Exchange Operators are authorized to setoff, settle or 

recoup any Exchange Obligations owing by the Utility to the Exchange Operators and to apply Exchange 

Collateral to satisfy any obligations of the Utility, in accordance with the terms of the applicable 

Prepetition Exchange Agreement, whether such obligations or collateral relate to the periods prior to 

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after the Petition Date, notwithstanding any limits otherwise imposed by section 553 of the Bankruptcy 

Code. 

7. The Trading Counterparties are authorized to exercise any valid right to setoff, settle or 

recoup any obligations owing by the Utility to the Trading Counterparties, and to apply cash collateral 

to outstanding obligations, notwithstanding any limits otherwise imposed by section 553 of the 

Bankruptcy Code. The Trading Counterparties may hold any excess cash collateral as security for any 

postpetition obligations and the Utility is authorized to enter into new transactions with Trading 

Counterparties consistent with past practice and to provide additional cash collateral to the Trading 

Counterparties in connection with such postpetition transactions. 

8. The Utility shall be authorized, but not directed, to pay amounts or post funds to the 

Future Commission Merchants in connection with the Prepetition FCM Agreements in the ordinary 

course of business on a postpetition basis in an amount not to exceed $15 million. 

9. Notwithstanding anything herein to the contrary, the Exchange Operators shall have all 

rights and remedies provided under the Prepetition Exchange Agreements or applicable law in the case 

of nonpayment by the Utility, including closing out of open transactions, application of collateral, 

cessation of service, set off or recoupment rights, and such other remedies as provided under the terms 

of the Prepetition Exchange Agreements, and the automatic stay pursuant to section 362(a) of the 

Bankruptcy Code is expressly waived to allow the Exchange Operators to exercise such rights and 

remedies without having to seek any further relief from the Bankruptcy Court and to take all actions to 

validate and perfect the liens and security interests granted by the Utility in the Exchange Collateral. 

10. Notwithstanding anything contained in the Motion, the relief granted in this Interim 

Order, and any actions taken pursuant to such relief, the Debtors shall reserve: (i) all rights to object to 

a claim or assertion by any party that any of the Prepetition Exchange Agreements are governed by 

section 546, 555, 556, and/or 559 of the Bankruptcy Code or that such provisions in any way apply to 

such agreements; and (ii) all rights (including, without limitation, any right of setoff, settlement, or 

recoupment), claims, counterclaims, and defenses in any way relating to the Exchange Obligations or 

the Prepetition Exchange Agreements. 

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11. Nothing contained in this Interim Order or in the Motion is intended to be or shall be 

construed as (a) an admission as to the validity of any claim against the Debtors, (b) a waiver of the 

Debtors’ or any appropriate party in interest’s rights to dispute any claim, or (c) an approval or 

assumption of any agreement, contract, program, policy, or lease under section 365 of the Bankruptcy 

Code. Likewise any payment made pursuant to this Interim Order is not intended to be and shall not be 

construed as an admission to the validity of any claim or a waiver of the Debtors’ rights to dispute such 

claim subsequently. 

12. Notwithstanding entry of this Interim Order, nothing herein shall create, nor is intended 

to create, any rights in favor of or enhance the status of any claim held by, any party. 

13. The requirements for immediate entry of this Interim Order pursuant to Bankruptcy Rule 

6003(b) have been satisfied. 

14. The requirements of Bankruptcy Rules 4001(d) and 6004(a) are waived. 

15. Notwithstanding the provisions of Bankruptcy Rules 4001(a)(2) and 6004(h), this 

Interim Order shall be immediately effective and enforceable upon its entry. 

16. The Debtors are authorized to take all steps necessary or appropriate to carry out this 

Interim Order. 

17. A final hearing to consider the relief requested in the Motion shall be held on February 

27, 2019 at 9:30 a.m. (Prevailing Pacific Time) and any objections or responses to the Motion shall be 

filed and served so as to be actually received on or prior to February 20, 2019 at 4:00 p.m. (Prevailing 

Pacific Time). 

18. This Court shall retain jurisdiction to hear and determine all matters arising from or 

related to the implementation, interpretation, or enforcement of this Interim Order. 

** END OF ORDER ** 

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