CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
SR 2017-073
June 6, 2017
Consent Agenda

TO: Honorable Mayor and City Council Members

SUBMITTED BY: Paul Tomasi, Director of Public Safety

APPROVED BY: Chip Rerig, City Administrator

SUBJECT: Consideration of a resolution authorizing the City Administrator to execute a settlement

agreement with Pacific Gas & Electric Co.

RECOMMENDATION

Approve a resolution authorizing the City Administrator to execute a settlement agreement with Pacific Gas &
Electric Co.

BACKGROUND / SUMMARY

The City of Carmel-by-the-Sea has been in litigation and negotiations with Pacific Gas & Electric Co. (PG&E)
since the occurrence of a natural gas explosion, on March 3, 2014, at a single-family residential structure
located at the corner of Guadalupe Street and Third Avenue. Following the event, and the subsequent
inadequate PG&E- sponsored internal investigation, the City sought the institution of an Order Instituting
Investigation (an investigation, similar to an indictment, called an OII) with the California Public Utilities
Commission (CPUC) to investigate the recordkeeping practices of the company with respect to its distribution
lines. The CPUC opened an OII to investigate and (potentially) penalize PG&E for its recordkeeping practices
on November 20, 2014. The City has very actively participated in the CPUC proceeding/OII.

The CPUC ultimately fined PG&E $37 million for the explosion and response. The fine is the second largest
fine against a natural gas utility in the State of California. Specifically, the CPUC fined PG&E $26.5 million for
its failure to comply with record keeping practices, and the CPUC fined PG&E for $10.8 million for its dismal
emergency response practices after the leak and the explosion. In the final decision dated August 26, 2106,
PG&E was ordered to meet and confer with Carmel and the CPUC Safety Enforcement Division to consider
other actions and protocols to insure greater public safety and adequate response.

The City Councils ad hoc committee charged with negotiations includes Mayor Steve Dallas, City
Administrator Chip Rerig, and Director of Public Safety Paul Tomasi. City Attorney Don Freeman and outside
Counsel Britt Strottman of Meyers Nave have been supporting the ad hoc committee. The City Council has
reviewed the matter in closed session under government code 54956.9 (c) for litigation.

The City argued that PG&Es negligent conduct and systemic failures caused irreparable harm to the
community and its residents, and that PG&Es failures also, cost the City substantial taxpayer funds (including
valuable time, which could have been spent on other issues of public concern to the Citys residents). City
officials and staff have been working to insure that PG&E has protections in place to preclude future incidents
such as that the City experienced in March of 2014. These protections include, but are not limited to regular
system-wide inspections and preventive maintenance of natural gas distribution lines; dissemination of
proprietary and confidential transmission and distribution line maps to City public safety personnel (Police, Fire,
and Public Works); installation of natural gas distribution line protection equipment as well as the training of
PG&E personnel; and vastly improved records keeping practices and principles. PG&E prepared a Pipeline
Information packet included as Attachment 1.

The City also expects a fair settlement that adequately reimburses the City for its expenses relating to the
response to the explosion (including pavement rehabilitation), work with the CPUC, communicating with PG&E
about its system and safety, and negotiating the settlement agreement with PG&E.

After many months of negotiations, the City and PG&E have crafted a settlement agreement which includes
the following:

settle the Citys damages, harm, losses, fees, costs, expenses, and other detriments arising out of the
explosion for $1,617,000,
the City releases PG&E of all claims, damages, harm, causes of action, liabilities, obligations, fees,
and/or costs whether known or unknown relating to the explosion,
the City may participate in any future safety-related proceedings at the CPUC against PG&E that do not
relate to the March 3, 2014 explosion,
PG&E agrees to indemnify and release Carmel of any claims relating to the March 3, 2014 explosion,
PG&E agrees to defend the City against any third party claims relating to the explosion, and PG&E
agrees to pay for any attorneys fees resulting from any third party claims.

The City and PG&E also agree to bear their own costs for any attorneys fees and costs resulting from the
settlement negotiations and the agreement itself. As referenced above, the City utilized the services of Meyers
Nave for representation. Meyers Nave has billed the City a total of $530,022.24 for services since July 2014.
These services included; public relations outreach, participation in the California Public Utilities Commission
proceedings, participation in closed sessions, and the settlement agreement.

In addition to reaching a settlement agreement, staff worked with PG&E to determine the best ways to re-
establish a positive relationship between the community and PG&E during settlement negotiations, which
would continue after an agreement has been reached. To reach this end the PG&E Engagement Plan was
agreed upon by the City, and PG&E has agreed to the following:

provide a partnership with the City in October 2016 by contributing $5000 to help supply golf carts for
guests and staff to use during the Citys Centennial festivities,
assist the City with messaging in The Carmel Pine Cone regarding storm preparedness,
develop and implement staff and contractor training regarding 811 safe digging workshops,
schedule regular meetings with City staff to continue to develop positive relationships,
work with staff on implementing a safe-dig certification program called the Golden Shovel Program,
develop and implement a tree planting campaign with Friends of Carmel Forest.

In partnership with the Friends to enhance and beautify the City, PG&E is dedicated to plant and maintain 100
trees within 12 months after execution of the settlement agreement. PG&E will continue to meet with the
Friends to formalize a plan to meet the first year goal and further develop an evolving list of additional partners
to ensure a successful campaign. The initial investment to the Friends of Carmel Forest has been $25,000
with PG&E committed to making similar investments in ongoing tree/beautification efforts in the City and
throughout the region. The City will collaborate with these groups to insure that the correct trees are planted in
the correct location, and that adjacent property and business owners are engaged prior to actual plantings.

FISCAL IMPACT

Although the City is precluded from seeking reimbursement for legal expenses related to the litigation, we will
receive $1,617,00 divided roughly equally between staff time, pavement work (including project management
costs), and time to implement and enforce mitigation measures). Staff will deposit the settlement proceeds into
our Operating Reserve.
FISCAL IMPACT
 PRIOR CITY COUNCIL ACTION

None.

ATTACHMENTS

1. Resolution
2. PG&E Pipeline Information Packet
3. Copy of the PG&E settlement agreement
 CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL

RESOLUTION NO. 2017-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA APPROVING THE

PACIFIC GAS & ELECTRIC CO. SETTLEMENT AGREEMENT.

WHEREAS, the City has been in litigation and negotiations with Pacific Gas & Electric Co. since the
explosion of a single-family residential structure located at the corner of Guadalupe Street and Third Avenue;
and

WHEREAS, the City actively participated in the California Public Utilities Commission proceedings and
Order Instituting Investigation;

WHEREAS, as result Pacific Gas & Electric Co. was penalized $26.5 million for its record keeping
practices and $37 million for the explosion and response; and

WHEREAS, Pacific Gas & Electric Co.s negligent failures caused irreparable harm to the community
and cost the City substantial taxpayer funds; and

WHEREAS, an ad hoc committee supported by the City Attorney and representation from Meyers Nave
undertook negotiations for a settlement agreement, which were reviewed by City Council in Closed Session
meetings per Government Code Section 54956.9 (c); and

WHEREAS, the ad hoc committee has achieved a settlement that adequately reimburses the City for its
expenses relating to the explosion, work with the California Utilities Commission, communications with PG&E
about its system and safety, and the negotiations of the settlement agreement.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-
THE-SEA DOES HEREBY:

Authorize the City Administrator to execute a settlement agreement Exhibit A with Pacific Gas &
Electric Co.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this
6th day of June 2017, by the following roll call vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

SIGNED: ATTEST:

_______________________ ___________________________
Steve G. Dallas, Mayor Ashlee Wright, City Clerk


Pipeline Information for the

City of Carmel-by-the-Sea (Addendum)
March 2017
Prepared by Pacific Gas & Electric Company

PG&Es Vision for Gas Operations

Become the safest, most reliable gas company in the nation

Our Goal
Enhance communication and build trust with our customers and the
communities we serve

ThisdocumenthasbeendevelopedtoserveasanaddendumtothemorecomprehensivePipeline
InformationforCarmelbytheSeareportthatwassubmittedtotheCityinDecember2016.Thepurpose
ofthisaddendumistopresentinformationbaseduponaseriesofquestionsthatwereposedbythe
CityCouncilwhileinitiallyreviewingtheDecember2016document.Foradditionalreference,pleaserefer
tothePipelineInformationforCarmelbytheSeareport.
1. Question:HowmanymilesofgasdistributioninfrastructuredoesPG&EhavewithintheCity?

CarmelbytheSeahasapproximately37milesofgasdistributionmainsand3,064servicelineswithinthe
CityofCarmelbytheSea.Includedare:
14milesofsteelmain
23.1milesofplasticmain
o 2.1milesofAldylAplasticmain
o 21milesofotherplasticmain

Ofthe3,064services,1,723areplasticinsertedintoexistingsteel.

2. Question(s):Whatistheageofpipeandtheexpectedlifeofthepipe?Withthisinmind,what
arethereplacementplansandplansfortestingofpipewithintheCity?

Thereisnosetlifespanorlimitastohowlongapipelinemaysafelyremaininoperation.Withregular
maintenance,includinganactivecathodicprotectionprogramtopreventcorrosionofthepipe,ongoing
integritymanagementactivitiestoinspectthepipeandroutinemaintenance,thepipecanlastan
indefiniteperiod.PG&Eperformstheseandanumberofothermaintenanceactivitiestoensurethe
longevityandsafeoperationofitsnaturalgaspipelines.Anyissueidentifiedasathreattopublicsafetyis
alwaysaddressedimmediately.PG&Edoesnotdelayordeferworkthatisnecessaryforpublicsafety.If
anyofthesemaintenanceorassessmentactivitiesindicatethatthepipeneedstobereplaced,thatwork
isscheduledandcompletedlongbeforepipelineintegrityorpublicsafetycanbecompromised.

GasTransmission
Forexample,PG&EsNaturalGasTransmissionPipeline(DFM)181515,whichrunsalongHighway1
eastofCarmelbytheSea,wasoriginallyinstalledfrom19501969.
o PG&Eregularlytestsforleaksandassessthreatsfromweatherandoutsideforces.
Aerialpatrolsareperformedquarterlyatminimum.
VegetationsurroundingourtransmissionpipesarereviewedandaddressedasPG&E
workscollaborativelywithcustomersandthecommunitytosharewhatPG&Eknows
aboutthesafetyrisks,andtogether,developaplantoensurepublicsafetyintothe
futurewhilepreservingtheuniquecharacterofthecommunity.
PG&Epatrolsoursystemafteraseismicevent.
o PG&EhasreplacedsectionsofDFM181515overtheyearsasneededandasrecentlyas2015.
o DFM181515hasbeenpressuredtestedtoconfirmtheintegrityofthepipe.
o PleaseseebelowformoreinformationaboutthesectionofpipelinenearCarmelbytheSea.

TransmissionLinenearCarmelbytheSea
Percent
Maximum
Specified
Allowable #of Miles
Install Minimum
Line Operating OD Material Automated of
Year(s) Yield
Pressure Valves pipe
Strength
(MAOP)
(SMYS)
1951 8to
1815
313psig to 10 4to21.9 Steel None 2.64
15
2015 inches

GasDistribution
PG&Eworkstoreplacenaturalgasdistributionmainsbasedonfactorsrelatedtoconditionsand
surroundingsofthepipe.
o Theprimaryfactorindeterminingifamainistobereplacedisleakrepairdata,whichindicate
thepotentialofamaterialissue.
o Secondaryfactorsincludepipevintage,operatingpressure,thepotentialforground
movement,populationdensity,andareasofpublicassembly.
o Replacementprojectsareprioritizedinorderofthepipewiththegreatestcombinationof
consequenceandlikelihoodforleakage.Pleaseseebelowforupcomingplannedprojects.
o Forexample,PG&EhasworkedtoreplacecertaintypesofAldylAplasticdistributionmains
andhasreplacedapproximately2milesofAldylAwithinCarmelbytheSeasincelate2016.
3. QUESTIONWhataretheoverallactivitiesandcadenceofleaksurvey,inspections,and
maintenanceprotocolsforthegasdistributionsystemintheCityofCarmelbytheSea?
PG&EsnaturalgasdistributionmainsareinvirtuallyallstreetswithintheCityofCarmelbytheSea.
PG&Ehasaninspectionandmonitoringprogramtoensurethesafetyofitsnaturalgasdistribution
system.PG&Eregularlyconductsleaksurveysandcathodicprotection(corrosionprotection)system
inspectionsofthesteelpipeswithinitsnaturalgasdistributionsystem.Anyissuesidentifiedasathreat
topublicsafetyareimmediatelyaddressed.
LeakSurveys:PG&Eregularlyconductsleaksurveysofitsnaturalgaspipelines.Leaksurveysare
generallyconductedbyaleaksurveyorwalkingabovethepipelinewithleakdetection
instruments.PleaseseebelowforthefrequencythatPG&Eleaksurveysitsdistributionfacilities
withintheCityofCarmelbytheSea:

LeakSurvey
TypesofFacilitiesSurveyed
Frequency
6Month Areaswithin150feetofelectricsubstations
Highlypopulatedareas(suchasschoolsandbusiness
Annually
districts)
5Year Allotherareasofthegasdistributionsystem

CathodicProtectionSystemInspections:PG&Eutilizesanactivecathodicprotection(CP)system
onitssteelgasdistributionmainsandservicelinestoprotectthemagainstcorrosion.PG&E
inspectsitsCPsystemsannuallytoensuretheyareoperatingcorrectly.

IsolatedSteelRiserInspections:PG&Eutilizescathodicprotection(CP)onitsisolatedsteelrisers
toprotectthemagainstcorrosion.PG&EinspectstheCPontheisolatedsteelservicerisersevery
tenyearsperFederalRegulationstoensuretheCPisoperatingcorrectly.

AtmosphericCorrosionInspections:PG&Einspectsthesteelcomponentsofitsgasdistribution
systemexposedtotheatmosphereatleastonceeverythreeyearsforatmosphericcorrosion.

EmergencyResponseOverview
In2015,PG&Ecompletedthedistributionofallnecessaryemergencytools(pipesqueezers)toits
crewssystemwide,andthecrewscompletedthetrainingrequiredtoproperlyandsafelyoperatethis
equipment.Inthefirsthalfof2016,PG&Erespondedto67gasodorcallsinCarmelbytheSea,and
theaverageresponsetimewas20.4minutes.PG&Esaverageresponsetimesystemwidein2015
was20.3minutes

4. QUESTIONWhatgeneralintegritymanagementfactorsareevaluatedtodeterminewhichgas
linesneedtobereplaced?
PG&Eusesariskinformedapproachtoidentifyandprioritizedistributionpipelinereplacementthrough
programsbasedonconsiderationofthelikelihoodandconsequenceoffailure.Theseprogramsinclude:
GasPipelineReplacementProgram(GPRP):Establishedin1985,thescopeoftheprograminitially
consistedsolelyofcastironandpre1931steelmain.Overtime,theprogramscopehasbeen
modified,andnowtargetspre1941gasmainofsignificantrisk.Thepriorityforreplacinga
particularsectionofpipeisbasedonapriorityanalysis.Theprogramhasprioritythresholdsto
distinguishpipetargetedforreplacementversuspipethatisbeingmonitoredundertheprogram.
Eachsectionofpipeisassignedapriorityvaluecorrespondingwiththeprobabilityand
consequenceofaleak,aswellasthefollowingadditionalfactors:vintageage,pipespecifications
(suchasdiameter,jointtype,coatingtype,coatingcondition,andpressure),proximitytopublic
assemblyareas,seismic(proximitytofaultline),andpopulationdensity.PG&Ehascompletedthe
replacementofallknowncastironpipe.

MainReplacementReliabilityProgram(MRRP):Thisprogramfocusesonthereplacementofboth
steelandplasticgasmainstoimprovesafety,reliability,andmaintaincompliancewithpipeline
regulations.ThisprogramcoverspipethatdoesnotqualifyforreplacementundertheGPRPor
AldylA(Vintage)PlasticReplacementProgram.PG&Eprioritizesthepipeselectedfor
replacementbaseduponariskscoringprocess.Thescopeofworkforthisprogramisidentifiedby
ourlocalengineersthatworkinconjunctionwiththemaintenanceandconstructionorganizations.
Thisprogramusesathree(3)tiercriteriabasedonleakrates,populationdensities,andpublic
assemblyareas.

AldylA(Vintage)PlasticReplacementProgram:CertainvintagesofAldylAplastichave
demonstratedgreaterbrittlepropertiesandaremorevulnerabletodevelopinggasleaks.PG&E
inventoriedthegasdistributionsystemtoidentifythelocationandvintagesofAldylAplasticpipe
andinitiatedthisreplacementprogramin2012.TheDistributionIntegrityManagementgrouphas
developedamethodtoprioritizeandrecommendplasticmainreplacementprojects.Thismethod
utilizesarelativeriskrankingofplasticpipebasedonthelikelihoodofissuesandtheconsequence
ofthoseissues.Themainriskfactorsinthesecalculationsincludeconsiderationsforbodyofpipe,
cracking,fittingleaks,fusionfailures,alongwithnaturalfactorssuchassegmentsinproximityto
faultlinesandregionsofunstablesoils.Theconsequenceofpotentialissuesincorporates
populationdensityandproximitytopublicassemblyareassuchashospitals,churches,schools,or
sportingandentertainmentvenues

5. QUESTIONHowtheaboveactivitieslistedin#3tieintotheintegritymanagement
program/processtogeneratepipelinereplacementprojects?
a. Upcominggasdistributionworkplansfor2017and2018andahighlevellookatthe
associatedintegritymanagementfactorscontributingtotheirreplacement
b. Alookattheprevious2015and2016workplansandahighlevellookattheassociated
integritymanagementfactorscontributingtotheirreplacement.
a. PleaserefertothefollowingtableforplannedpipelinereplacementjobsinCarmelbytheSea:
Footageof PlannedYearof
Location ProjectDescription
Replacement Replacement
Replaceapproximately800feet
MonteVerde ofsteelmainduetoleak
800 2017
Street history,age,andpipe
condition.
Replaceapproximately800feet
ofsteelmainduetoleak
CasanovaStreet 800 2018
history,age,andpipe
condition.
Pleasenotethattheaforementionedprojectsarebasedoncurrentplans,andthoseplansaresubjectto
changeduetoarangeoffactors(e.g.permitting,materialavailability,availabilityofnewtechnologies,
etc.).
b. PleaserefertothefollowingtableforrecentlycompletedpipelinereplacementjobsinCarmelby
theSea:
Footageof Yearof
Location ProjectDescription
Replacement Replacement
ScenicRoad,Torres ReplaceAldylAmainduetoleak
~5,600 2015
Street,MesaDrive history,age,andpipecondition.

SantaFeStreet,
GuadalupeStreet, ReplaceAldylAmainduetoleak
~4,700 2015
PerryNewberry history,age,andpipecondition.
Way

 SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement and Release (hereinafter "Agreement") is made by and between

the City of Carmel-by-the-Sea (hereinafter the "City") and Pacific Gas and Electric Company

(hereinafter "PG&E"). The City and PG&E shall be referred to collectively as "the Parties."

RECITALS

A. The City alleges that it sustained and incurred damages, harm, losses, fees, costs,

expenses, and other detriment arising from or related to the gas release that ignited on March 3,

2014, near the intersection of 3rd Avenue and Guadalupe Street, in Carmel-by-the-Sea, California

(hereinafter the "Incident").

B. The City and PG&E now desire to resolve the City's claims against PG&E for

damages, harm, losses, fees, costs, expenses, and other detriment arising from or related to the

Incident without affecting the City's standing to participate in any future safety-related proceedings

at the California Public Utilities Commission that relate to City and or future claims, demands,

losses, damages, harm, actions, causes of action, suits, debts, promises, liabilities, obligations, fees,

costs, expenses, attorneys' fees, indemnities, duties, or other detriment, whether known or

unknown, fixed or contingent, accrued or not yet accrued, matured or not yet matured, anticipated

or unanticipated, of any kind whatsoever arising from or related to, directly or indirectly, either

Party may have that are not arising from or relating to the Incident.

C. A negotiated resolution of the City's claims against PG&E arising from or related to

the Incident has been reached as set forth in this Agreement.

For valuable consideration, the Parties agree, understand, represent, warrant, and covenant

as follows:

Settlement Agreement and Release

Page 1 of6
{00163933.00C;l}
 AGREEMENT

1.0 CONSIDERATION

For and in consideration of the releases, promises, and covenants made herein, PG&E shall

pay the total sum of One Million Six Hundred Seventeen Thousand Dollars ($1,617,000) to the City

within 14 days of execution of this Agreement by and on behalf of the City.

2.0. RELEASE AND DISCHARGE

2.1. In consideration of this Agreement, the City, on behalf of itself and its

representatives, officers, employees, and agents, hereby completely releases and forever discharges

PG&E, its agents, parents, subsidiaries and affiliates, and each of their past and/or present

representatives, directors, officers, members, shareholders, employees, partnerships, companies,

agents, insurers, attorneys, executors, heirs, contractors, and successors and all other persons or

entities who may have caused or contributed to the City's damages arising from or related to the

Incident (collectively, "PG&E Released Parties") from any and all claims, demands, losses,

damages, harm, actions, causes of action, suits, debts, promises, liabilities, obligations, fees, costs,

expenses, attorneys' fees, indemnities, duties, or other detriment, whether known or unknown, fixed

or contingent, accrued or not yet accrued, matured or not yet matured, anticipated or unanticipated,

of any kind whatsoever arising from or related to, directly or indirectly, the Incident.

2.2 In consideration of this Agreement, PG&E hereby completely releases and

forever discharges the City from any and all claims, demands, losses, damages, harm, actions,

causes of action, suits, debts, promises, liabilities, obligations, fees, costs, expenses, attorneys' fees,

indemnities, duties, or other detriment, whether known or unknown, fixed or contingent, accrued or

not yet accrued, matured or not yet matured, anticipated or unanticipated, of any kind whatsoever

arising from or related to, directly or indirectly, from the Incident.

Settlement Agreeme11t and Release

Page 2 of6
{00163933.DOC;l}
 2.3 The Parties understand and agree that this settlement is a compromise of

disputed claims, and this Agreement is not to be construed as an admission of liability on the part of

PG&E, which liability is expressly denied.

2.4 The City understands and acknowledges that by the execution of this

Agreement no further claims may ever be asserted by the City against the PG&E Released Parties

for the Incident. Accordingly, the City hereby waives any and all rights based upon the provisions

of California Civil Code section 1542, which reads as follows:

A general release does not extend to claims which the

creditor does not know or suspect to exist in his or her favor at the
time of executing this release, which if known to him or her must
have materially affected his or her settlement with the debtor.

2.5 The City understands and acknowledges that it may have sustained or in the

future may sustain additional damages or losses which may manifest themselves and which are

presently unknown, but nevertheless the City deliberately intends to and hereby does release the

Released Parties from all such damages or losses whenever occurring. The City understands and

agrees this waiver is an essential and material term of this Agreement and the settlement which

leads to it and that, without such waiver, the settlement would not have been entered into by PG&E.

2.6 The City agrees to abandon and dismiss with prejudice any and all causes of

action against the Released Parties arising from or related to the Incident.

2.7 This Settlement Agreement and Release is not intended to preclude the City's

participation in any future safety related proceedings at the California Public Utilities Commission

that relate to the City and or future claims, demands, losses, damages, harm, actions, causes of

action, suits, debts, promises, liabilities, obligations, fees, costs, expenses, attorneys' fees,

indemnities, duties, or other detriment, whether known or unknown, fixed or contingent, accrued or

not yet accrued, matured or not yet matured, anticipated or unanticipated, of any kind whatsoever

Settlement Agreement and Release

Page 3 of6
{00163933.DOC;l}
arising from or related to, directly or indirectly, either Party may have that are not arising from or

relating to the Incident.

3.0 ATTORNEYS' FEES AND COSTS

Each of the Parties shall bear its own attorneys' fees and costs arising from or related to the

Incident or in connection with this Agreement and the matters and documents referred to herein,

and all related matters.

4.0 INDEMNITY AND WARRANTY REGARDING LIENS

The City agrees to defend, indemnify and hold the PG&E Released Parties harmless from

any loss, claim or expense incurred directly or indirectly as a result of the inaccuracy of any

representation herein by the City. The City represents and warrants that no person or entity has or

may assert any liens, claims, subrogation claims, demands for payment, or other rights against the

amount paid in settlement or on any recovery by the City that is the subject of this Agreement.

With respect to any third party claims against either the City, PG&E, and/or PG&E and the City,

relating to the Incident ("Third Party Liability Claims"), PG&E agrees to, and shall, defend and

indemnify the City, and hold the City harmless from, any loss, claim or expense incurred directly or

indirectly as a result of any Third Party Liability Claims(s), including attorneys' fees.

5.0 REPRESENTATION OF COMPREHENSION OF DOCUMENT

In entering into this Agreement, the Parties represent that they have relied upon the advice

of their attorneys concerning the legal consequences of this Agreement and that the terms of this

Agreement are fully understood and voluntarily accepted by the Parties.

6.0 SEVERABILITY

Should any portion of this Agreement be declared void and unenforceable, such portion(s)

shall be considered independent and severable from the remainder, the validity of which shall

Settlement Agreement and Release

Page4 of6
{00163933.DOC;l}
 remain unaffected, except that paragraph 2.1 is the essence of this Agreement and shall not be

severable.

7.0 WARRANTY OF CAPACITY TO EXECUTE AGREEMENT

The City and PG&E each represent and warrant that each person executing this Agreement

on its behalf has full and complete legal authority to do so and thereby bind the Party on behalf of

which this Agreement is executed. The City represents and warrants that no other person or entity

has or has had any interest in the claims, demands, obligations, or causes of action referred to in this

Agreement; and that the City has the sole right and exclusive authority to execute this Agreement

and receive the sums specified or referenced in this Agreement.

8.0 ENTIRE AGREEMENT AND SUCCESSORS IN INTEREST

This Agreement contains the entire agreement between the City and PG&E with regard to

the matters set forth in it and shall be binding upon and inure to the benefit of the executors,

administrators, personal representatives, heirs, successors and assigns of each individual or entity.

9.0 NO THIRD PARTY RIGHTS

This Agreement is made for the benefit of the Parties and their successors and permitted

assigns, and neither this Agreement nor any provision hereof shall be construed or deemed to give

rise to rights in any other person or entity.

10.0 EXECUTION

This Agreement may be executed in multiple counterparts, each of which shall be deemed

an original and all of which together shall be deemed one and the same document, and it is agreed

and acknowledged that signatures by facsimile shall have the same force and effect as originals.

Settlement Agreement and Release

Page 5 of6
{00163933.DOC;I}
DATED: - - - - - - -, 2017 By: ____________________________

Carmel-by-the-Sea

DATED: _ _ _ _ _ _,2017 By: ________________________________

Pacific Gas and Electric Company

APPROVED AS TO FORM:

DATED: _ _ _ _ _ _.,2017 By: _______________________________

Attorney for Carmel-by-the-Sea

DATED: _ _ _ _ _ _,2017 By: ______________________________

Attorney for Pacific Gas and Electric Company

2801459.1

Settlement Agreement and Release

Page 6 of6
{00163933.DOC;l}