Reducing Asset Risk: PG&E’s Path to Improving Its Damage Prevention Program

John HigginsVice President, Safety and HealthPacific Gas and Electric Company

4.76June 2011

Highest dig-in rate for a single month

38% reduction in 33 months

Improving Results Over the Last Three Years

• Question:– How do you influence the behavior of someone you

have no influence over? They don’t work for you.

• Answer:– Partner with those that have influence over them, and

create influence where you can.

Everybody’s third party is someone else’s second party

The 3rd Party Damage Issue

Strategic Programs for Reducing Damages

• Habitual Offender Engagement

• Dig-in Reduction Team (DiRT)

• Holding Contractors Accountable Through Collections and Litigation

• 811 Ambassador Program

• Gold Shovel Standard

Engaging our Habitual Offenders

How Could WE Improve?

• PG&E marks were ‘not reliable’• Too slow to ‘get paint on the ground’• Inadequate response to ‘re-mark requests’ or questions• Long lead times for ‘standby’ personnel• One-call center wait times were too long

•Established a NULCA-standard training program

•Added staff to address 10-20% annual ticket growth rate

•Standardized tooling across the system for locators and crews

•Developed Quality Management Program

•Staffed a dedicated line to handle locating issues from contractor community

•Working with One-call centers to expand services and hours

Improvements for PG&E

Dig-in Reduction Team (“DiRT”)

21 DiRT team members deployed across 70,000-square mile service area:

Conducted nearly 12,000 job site visits over the last 12 months

Visit active excavations and intervene when non-compliant activities are identified

Support damage investigations

Over 30% of visits have uncovered either no 811 request or unsafe digging practices

Stopped 3,250 excavation jobs without a USA ticket (28% of total visits)

15% reduction in dig-ins with no USA tickets since deploying DiRT

Aerial and ground pipeline patrols provide further intervention into excavation near our critical facilities

In 2016, conducted 128 811 Call Before You Dig workshops, attended by 4,000 excavators, representing 431 excavation companies

Holding Contractors Accountable• California State Licensing Board• Temporary restraining order • Local government partnerships to stop

repeat offenders from securing future contracts

o In 2015, PG&E supported the City of San Francisco’s decision to bar a local excavation company from future work due to its safety record

• Developing cooperative relationships with professional contractors associations

• Supporting legislation aimed at clarifying enforcement of 811 laws

• Claims invoicing totals increased by 53% in 2016, compared to 2015

• 68% reduction in billing cycle time

Outreach Activities

• Annually send out 6.9 million direct mailings and e-mails to customers with 811 and safe digging information

• Targeted radio, billboard and online 811 advertising in cities with high numbers of dig-ins

• Participate in over 300 community events annually, utilizing gas and electric safety demonstration boards

• In 2016, further developed partnerships with local farm bureaus

• Regularly participate in local events within the agriculture community

• Targeted advertising in major agriculture publications

811 Employee Ambassador Program

Provides education and awareness to

our 23,000 employees living throughout our

service area

Employee calls damage

prevention report line if they observe unsafe excavation

Damage prevention expert is deployed to the

job site to investigate and

educate the contractor about 811 and digging

safely

• PG&E announces a first of its kind program, Gold Shovel Standard• Goal to seed the region with GSS certified contractors• Pilot the program internally• Focused only on PG&E contractors

The Gold Shovel Strategy

PG&E's GOLD SHOVEL STANDARD PAVES THE WAY FOR SAFE EXCAVATION

New standard focuses on public safety by preventing damage to underground utility lines

Release Date: August 11, 2014Contact: PG&E External Communications (415) 973-5930

San Francisco, Calif.— Today, Pacific Gas and Electric Company (PG&E) announced a new, first-of–its-kind excavation safety standard at an event for construction professionals. The Gold Shovel Standard, created by PG&E, will ensure that contractors doing excavation work for PG&E demonstrate a commitment to safe digging.

"PG&E's commitment to safety extends beyond the work done by our employees," said Jesus Soto, Senior Vice President of Gas Operations at PG&E. "The Gold Shovel Standard ensures that contractors doing excavation work for PG&E have a strong commitment to safe excavation practices and are measured against a consistent safety standard."

“A rising tide lifts all boats” John F. Kennedy

“A Rising Tide Lifts All Boats” attributed to John F. Kennedy

• Dominion, Kinder Morgan, PG&E and Xcel Energy official form the Gold Shovel Association• Independent 501(c)(3) association

March, 2016

The Sacramento Challenge

• Moderate density; rural and urban; farming and city• Frequent damages in extremely high-profile location• Seat of government• PG&E – gas• City of Sacramento – water and sewer• SMUD – electric• Rapidly growing, significant construction

• Independent 501(c)(3) association• Easy to adopt for City of Sacramento• Non-PG&E entity• Partner through an association• Low cost• Impactful

Gold Shovel Association

• Gold Shovel Association - initial meeting with City of Sacramento• Facilitated by PG&E’s relationships

April, 2016

City of Sacramento requires Gold Shovel Standard for Accelerated Water Meter Project

September, 2016

• All PG&E contractors are migrated to Gold Shovel Association• Requires sub-contractors to be certified (with few exceptions)• Reaches another set of 3rd party excavators

December, 2016

PG&E Prime

3rd Party Sub 3rd Party Sub

3rd Party Sub-of-Sub 3rd Party Sub-of-Sub

• SoCalGas and SDG&E join Gold Shovel Association

• Encompasses nearly all of California gas customers

March, 2017

City of Sacramento Joins Gold Shovel Association

July, 2017

• City of Sacramento adopted because – it was easy– PG&E had already seeded the market with

certified excavators– it was good for their residents

• Implementation– bidders for projects with excavation– permits– franchise rights– emergency suppliers

• Sacramento Municipal Utility District (SMUD) – electric provider begins embracing GSS

August, 2017

• Leverage leadership to municipal partners• Direct interaction with excavators• Use Gold Shovel to influence subcontractors

Everybody’s third party is someone else’s second party

What’s the Recipe

“The three most important ways to lead people are… by example… by example… by example.” -

Albert Schweitzer

The gas and pipeline companies MUST be the leaders. Only we can provide the leadership.

Closing Thought