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) 

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) 

DECLARATION OF MARINO MONARDI IN 

SUPPORT OF THE DISCOUNTED EP 

ASSUMPTION MOTION 

 Hearing Date: August 28, 2019 

Hearing Time: 9:30am (Pacific Time) 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Judge: Hon. Dennis Montali 

Objection Deadline: August 14, 2019, at 4:00 p.m. 

(Pacific Time)

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). 

Case: 19-30088 Doc# 3346 Filed: 07/31/19 Entered: 07/31/19 18:47:42 Page 1 of

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

I, Marino Monardi, pursuant to section 1746 of title 28 of the United States Code, hereby 

declare under penalty of perjury that the following is true and correct to the best of my knowledge, 

information, and belief: 

1. I am a Director, Energy Procurement and Policy Division, at Pacific Gas and Electric 

Company (the “Utility” and, together with PG&E Corporation, the “Debtors”). 

2. I am knowledgeable and familiar with the Utility’s day-to-day operations and, 

specifically, the Utility’s energy procurement agreements. 

3. I am authorized to submit this Declaration (the “Declaration”) on behalf of the 

Debtors in support of the Third Omnibus Motion of Debtors Pursuant to 11 U.S.C § 365(a), Fed. R. 

Bankr. P. 6006, and B.L.R. 6006-1 for an Order Approving Assumption of Certain Contract Price 

Discounted Energy Procurement Agreements (the “Motion”).1

4. Except as otherwise indicated herein, the facts set forth in this Declaration are based 

upon my personal knowledge, my review of relevant documents, and information provided to me by 

the Debtors’ employees or the Debtors’ legal, restructuring, and financial advisors. If called upon to 

testify, I would testify competently to the facts set forth in this Declaration. I am authorized to submit 

this Declaration on behalf of the Debtors. 

 

1

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

terms in the Motion. 

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THE EP AGREEMENTS 

5. In the ordinary course of its operations, the Utility is party to various types of energy 

procurement agreements, including, without limitation, (a) power purchase agreements, pursuant to 

which the Utility purchases electric power from generators, and (b) capacity storage agreements, 

which provide the Utility access to capacity from energy storage facilities. 

6. The Utility routinely and continuously evaluates its energy procurement agreements 

in light of, among other things, the Utility’s operations, market conditions, pricing, the needs of the 

Utility’s customers, the regulatory requirements imposed on the Utility, and to ensure the Utility is 

safely and reliably delivering power. As part of that evaluation, the Utility has identified the EP 

Agreements for assumption in the Chapter 11 Cases. Following discussions with the EP 

Counterparties (as defined herein), the Utility and each of the respective counterparties have agreed 

that, in exchange for assumption of the applicable EP Agreement, the parties will enter into the EP 

Amendments described below, which include valuable discounts for the Utility. 

7. It is my understanding that the effectiveness of each of the EP Amendments and 

assumption of the EP Agreements pursuant to the Motion is conditioned upon the Utility obtaining 

the necessary approvals from the Bankruptcy Court and California Public Utility Commission (the 

“CPUC”). Accordingly, contemporaneously herewith, the Utility is seeking CPUC approval for 

the EP Amendments but, to the extent such approval is not obtained prior to the hearing on the 

Motion, the Utility requests that the Court approve the Utility’s assumption of the EP Agreements, 

as amended, subject to CPUC approval. Pursuant to the EP Amendments, in the event CPUC 

approval is not attained within one hundred and eighty (180) days from the date approval is sought 

from the CPUC or the date of the Motion (whichever is later), either party may terminate the 

applicable EP Amendment and the assumption of the applicable EP Agreement shall be null and 

void. The various EP Agreements and the EP Amendments are discussed in further detail below. 

THE POWER PURCHASE AGREEMENTS 

8. To enable the Utility to provide power to its customers and meet regulatory 

requirements, the Utility is party to various power purchase agreements (each, a “PPA”) with 

developers and operators of power generation facilities and projects. Pursuant to the Motion, the 

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

Utility is seeking to assume the following three (3) PPAs, each as amended by the applicable PPA 

Amendment Agreements (as defined below): 

 Power Purchase Agreement between the Utility and Re Gaskell West 

3 LLC dated September 22, 2017 (the “Gaskell 3 PPA”); 

 Power Purchase Agreement between the Utility and Re Gaskell West 

4 LLC dated September 22, 2017 (the “Gaskell 4 PPA”); and 

 Power Purchase Agreement between the Utility and Re Gaskell West 

5 LLC dated September 22, 2017 (the “Gaskell 5 PPA” and, together 

with the Gaskell 3 PPA and the Gaskell 4 PPA, the “PPAs”). 

9. A copy of the form of the PPAs is available at 

https://www.pge.com/pge_global/common/pdfs/for-our-business-partners/energy-supply/electricrfo/wholesale-electric-power-procurement/2017%20PV/PGE_2017_PV_PPA_final.docx. Aside 

from confidential commercial terms, I understand that the PPAs are substantially similar to the form. 

10. The PPAs are long-term purchase agreements pursuant to which the Utility will 

purchase electric power generated by a generation facility or project operated by the respective 

counterparty to the PPAs (collectively, the “PPA Counterparties”). The generation projects that 

will generate the power to be purchased by the Utility pursuant to the PPAs, however, are currently 

under development and not yet operational and, as a result, the PPA Counterparties have not yet 

commenced delivering power to the Utility.2 Upon completion of the generation projects, pursuant 

to the terms of the respective PPAs, the Utility will purchase power from the PPA Counterparties for 

a period of fifteen years, on a dollar per megawatt hour basis. Consequently, the Utility has no 

outstanding obligations to the PPA Counterparties under the PPAs, and no cure amounts are owed or 

payable in connection with the assumption of the PPAs as proposed pursuant to the Motion. 

11. In connection with the proposed assumption of the PPAs, the Utility has negotiated 

favorable amendments to the PPAs with the PPA Counterparties. These amendments are 

memorialized in agreements between the Utility and the respective PPA Counterparty (the “PPA 

 

2The PPA Counterparties entered into the PPAs prior to the completion of the respective generation 

projects because the PPA Counterparties use projected future revenue from the PPAs to obtain 

financing for the development and construction of the projects. 

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

Amendment Agreements”). Among other things, the Utility and the PPA Counterparties have 

agreed to a ten percent (10%) discount to the respective per megawatt hour purchase price of power 

under each PPA. Additionally, the Utility and the PPA Counterparties have agreed to extend project 

and construction related deadlines in each PPA, and consequently, the time by which the Debtors 

would be obligated to commence purchasing power, by up to 24 months. 

THE ENERGY STORAGE AGREEMENTS 

12. To enable the Utility to comply with applicable regulatory requirements related to 

storage capacity and resource adequacy, the Utility is party to various energy storage agreements with 

various counterparties that provide energy storage services. Pursuant to the Motion, the Utility is 

seeking to assume the following two (2) energy storage agreements, each as amended by the 

applicable ESA Amendment Agreements (as defined below): 

 Behind the Retail Meter Capacity Storage Agreement between the 

Utility and mNOC AERS LLC (“mNOC”), dated June 1, 2018, as 

previously amended by letters dated October 11, 2018 and November 

27, 2018 (the “mNOC ESA”); and 

 Energy Storage Resource Adequacy Agreement between the Utility 

and Hummingbird Energy Storage, LLC (“Hummingbird”), dated 

June 1, 2018, as previously amended by letters dated October 11, 2018, 

November 27, 2018 and March 28, 2019, (the “Hummingbird ESA” 

together with the mNOC ESA, the “ESAs” and, collectively with the 

PPAs, the “EP Agreements”). 

13. Copies of the forms of the ESAs are available at 

http://www.pge.com/includes/docs/word_xls/b2b/wholesaleelectricsuppliersolicitation/Energy_Stor

age_2016/AppendixF2_CapacityStorageAgreement_IssuanceFinal.docx and 

http://www.pge.com/includes/docs/word_xls/b2b/wholesaleelectricsuppliersolicitation/Energy_Stor

age_2016/AppendixF3_BTMCapacityStorageAgreement_IssuanceFinal.docx. Aside from 

confidential commercial terms, the ESAs are substantially similar to the forms. 

14. The ESAs are long term agreements, pursuant to which the Utility will purchase 

storage capacity in certain battery storage projects from the respective counterparties to the ESAs (the 

“ESA Counterparties” and together with the PPA Counterparties, the “EP Counterparties”). The 

Utility utilizes the ESAs to meet the resource adequacy requirements (the “RARs”) imposed on it by 

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

the CPUC and other regulators. The RARs ensure that California’s load serving entities (including 

utilities, community choice aggregators, and energy service providers) have sufficient capacity to 

meet peak electric load demand on their networks, and require that load-serving entities maintain a 

reserve margin. Like the PPAs, the energy storage projects that are the subject of the ESAs are 

currently under development and not yet operational, and the ESA Counterparties have not yet 

commenced providing storage capacity to the Utility.3 Upon completion of the storage projects, the 

Utility will purchase storage capacity from mNOC and Hummingbird for periods of ten (10) or fifteen 

(15) years, respectively, on a dollar per kilowatt-month basis. Consequently, the Utility has no 

outstanding obligations to the ESA Counterparties under the ESAs and no cure amounts are owed or 

payable in connection with the assumption of the ESAs as proposed pursuant to the Motion. 

15. In connection with the assumption of the ESAs, the Utility has negotiated favorable 

amendments to the ESAs with the ESA Counterparties The ESA Amendments are memorialized in 

amendment agreements between the Utility and the respective ESA Counterparty (the “ESA 

Amendment Agreements” and, together with the PPA Amendment Agreements, the “EP 

Amendments”). Specifically, with respect to the mNOC ESA, among other things the parties have 

agreed to discounts on the contract price of approximately eleven percent (11%), and have agreed to 

extend two project completion milestones in the mNOC ESA by approximately fifteen (15) months, 

which will result in a corresponding delay to the Utility’s obligations to pay for the additional capacity 

by approximately fifteen (15) months. Similarly, with respect to the Hummingbird ESA, among other 

things, the parties have agreed to discounts on the contract price of approximately ten percent (10%) 

and have agreed to extend two project completion milestones in the Hummingbird ESA by twelve 

(12) months, which will result in a corresponding delay to the Utility’s obligations to pay for such 

capacity by approximately twelve (12) months. 

BASIS FOR ASSUMPTION 

16. I believe that the Utility’s assumption of the EP Agreements, as amended, represents 

a valid exercise of the Utility’s business judgment and will benefit the Utility’s estate. Energy 

 

3

 The ESA Counterparties use the projected future revenue from the ESAs to obtain financing for the 

development and construction of the energy storage project. 

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

procurement is a critical aspect of the Utility’s business operations. The Utility is undertaking a 

careful and thorough review of its portfolio of EP Agreements and has determined that the terms of 

the EP Agreements, as amended, are reasonable under the circumstances and that maintaining the 

ongoing, mutually beneficial relationships with the EP Counterparties is in the best interests of the 

Utility and its estate. Additionally, the EP Agreements ensure that the Utility will continue to have 

sources of power generated by renewable energy and battery storage capacity, enabling the Utility to 

comply with the California Renewables Portfolio Standard Program, energy storage compliance 

requirements, and other related procurement requirements, as required by sections 3291(b)(1)(D) and 

3292(b)(1)(D) of the California Public Utilities Code, as recently amended by Assembly Bill 1054. 

17. The Utility has negotiated considerable discounts to the contract prices under the EP 

Agreements. The Utility estimates that the nominal value of the aggregate savings achieved pursuant 

to the EP Amendments is approximately $20 million over the collective life of the EP Agreements. 

Moreover, the Utility has determined that the savings obtained through the discounted contract price 

far outweighs the milestone extensions that the Utility is granting to the EP Counterparties under the 

EP Amendments. Such extensions necessarily arose from the Utility’s commencement of the Chapter 

11 Cases and the resulting difficulty for the EP Counterparties to obtain the requisite financing to 

complete the underlying projects. Finally, as discussed above, the assumption of the EP Agreements 

will not result in any incremental costs to the Debtors’ estates because no cure amounts are owed by 

the Utility to assume the EP Agreements. 

18. Accordingly, for the reasons set forth above and in the Motion, I believe that 

assumption of the EP Agreements, as amended, is a valid exercise of the Utility’s business judgment, 

is in the best interest of the Utility, its creditors and other parties in interest, and the relief sought in 

the Motion should be approved. 

[Remainder of page intentionally left blank]

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

Pursuant to 28 U.S.C. § 1746, I declare under the penalty of perjury, that the foregoing 

is true and correct to the best of my knowledge, information, and belief, and that this declaration was 

executed at San Francisco, California on July 31, 2019. 

/s/ Marino Monardi

Marino Monardi

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