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 UTILITY’S SECOND 

DISCOUNTED EP ASSUMPTION MOTION 

Hearing Date: November 13, 2019 

Hearing Time: 10:00am (Pacific Time) 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Judge: Hon. Dennis Montali 

Objection Deadline: October 30, 2019 

 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# 4204 Filed: 10/15/19 Entered: 10/15/19 11:25:02 Page 1 of

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

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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 Sixth Omnibus Motion Pursuant to 11 U.S.C. § 365(a), Fed. R. Bankr. 

P. 6006, and B.L.R. 6006-1 to Approve the Utility’s 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. 

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 

1

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

terms in the Motion. 

Case: 19-30088 Doc# 4204 Filed: 10/15/19 Entered: 10/15/19 11:25:02 Page 2 of

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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, 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; however, 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 EP Agreements and the EP Amendments are discussed in further detail below. 

THE POWER PURCHASE AGREEMENT 

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 

Utility is seeking to assume that certain Power Purchase Agreement, between the Utility and Java 

Solar, LLC (“Java”) dated December 18, 2015 (as previously amended by the First Amendment 

dated July 19, 2017, the “Java PPA”), as amended by the PPA Amendment Agreement (as defined 

below). 

9. A copy of the form of the Java PPA is available at https://www.pge.com/en_US/forour-business-partners/floating-pages/sixth-renewable-auction-mechanism/sixth-renewableCase: 19-30088 Doc# 4204 Filed: 10/15/19 Entered: 10/15/19 11:25:02 Page 3 of

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auction-mechanism.page?ctx=large-business. Aside from confidential commercial terms, I 

understand that the Java PPA is substantially similar to the form. 

10. The Java PPA is a long-term purchase agreement, pursuant to which the Utility will 

purchase electric power generated by a generation facility or project operated by Java. The 

generation project that will generate the power to be purchased by the Utility pursuant to the Java 

PPA is currently under development and not yet operational and, as a result, Java has not yet 

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

to the terms of the Java PPA, the Utility will purchase power from Java for a period of seventeen 

years and three months, on a dollar per megawatt hour basis. Consequently, the Utility has no 

outstanding obligations to Java under the Java PPA, and no cure amounts are owed or payable in 

connection with the assumption of the Java PPA as proposed pursuant to the Motion. 

11. It is my understanding that Java entered into the Java PPA prior to the completion 

of the generation project in part because Java uses projected future revenue from the Java PPA to 

facilitate the development and construction of the project. 

12. In connection with the proposed assumption of the Java PPA, the Utility has 

negotiated a favorable amendment with Java (the “PPA Amendment Agreement”). Among other 

things, the Utility and Java have agreed to a ten percent (10%) discount to the respective per 

megawatt hour purchase price of power under the Java PPA. Additionally, the Utility and Java 

have agreed to extend project and construction related deadlines in the Java PPA, and consequently, 

the time by which the Debtors would be obligated to commence purchasing power under the Java 

PPA as amended, has also been extended by 24 months. 

THE ENERGY STORAGE AGREEMENT 

13. 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 that certain Energy Storage Resource Adequacy Agreement, between the 

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Utility and Dynegy Marketing and Trade, LLC (“Dynegy”), dated June 6, 2018, (as previously 

amended by letters dated October 11, 2018 and November 27, 2018, the “Dynegy ESA”, and 

together with the Java PPA, the “EP Agreements”), as amended by the ESA Amendment (as 

defined below). 

14. Copies of the form of the Dynegy ESA are available at 

https://www.pge.com/en_US/for-our-business-partners/energy-supply/electric-rfo/wholesaleelectric-power-procurement/local-sub-area-energy-storage-rfo.page?ctx=large-business. Aside 

from confidential commercial terms, I understand the Dynegy ESA is substantially similar to the 

form. 

15. The Dynegy ESA is a long-term agreement, pursuant to which the Utility will 

purchase storage capacity in a battery storage project from Dynegy (together with Java, the “EP 

Counterparties”). The Utility utilizes the Dynegy ESA to meet the resource adequacy 

requirements (the “RARs”) imposed on it by 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 Java PPA, the 

energy storage project that is the subject of the Dynegy ESA is currently under development and 

not yet operational, and Dynegy has not yet commenced providing storage capacity to the Utility. 

Upon completion of the storage project, the Utility will purchase storage capacity from Dynegy for 

a period of twenty (20) years, on a dollar per kilowatt-month basis. Consequently, the Utility has 

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

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

16. In connection with the assumption of the Dynegy ESA, the Utility has negotiated 

favorable amendments to the Dynegy ESA (the “ESA Amendment and, together with the PPA 

Amendment Agreement, the “EP Amendments”). Specifically, with respect to the Dynegy ESA, 

among other things, the parties have agreed to discounts on the contract price of five percent (5%), 

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and have agreed to extend project completion milestones in the Dynegy ESA by six (6) months, 

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

capacity by approximately six (6) months. 

BASIS FOR ASSUMPTION 

17. I believe that the Utility’s assumption of each of the EP Agreements, as amended, 

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

Energy 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 

continues 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 

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

Bill 1054. 

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

Agreements. In addition, the Utility has determined that the savings obtained through the 

discounted contract prices far outweigh the milestone extensions that the Utility is granting to the 

EP Counterparties under the EP Amendments. 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. 

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

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. 

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

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

3 executed at San Francisco, California on 

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2019. 

/l{� 

·�rino Monardi

October 15, 

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