Pacific Gas and Electric Company’s (PG&E) Gas Operations Improvement Tracker contains information about organizational and operational milestones PG&E has achieved since 2011. The Improvement Tracker is updated on a quarterly basis and all content is subject to change.

If you any have questions about information contained in the tracker, please contact your local PG&E representative or call PG&E’s media line at 1-415-973-5930.

September 2013

PG&E’s Gas Operations Improvement Tracker

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Highlights | 3 Safety Culture | 4

Background | 4 Management Focus | 4 Public Outreach and Communication | 4 Quality and Improvement | 5

Asset Management and Maintenance | 6 Background | 6 Asset Management Policy | 6 Data Management and Coordination | 6, 7 Technology Upgrades | 7 Class Location Verification | 8 Mapping | 8

Risk Management | 9 Background | 9 Risk Management | 9

Integrity Management | 10 Background | 10 Transmission Integrity Management Program | 10 Gas Pipeline Replacement Program | 10, 11 Distribution Integrity Management Program | 11 Leak Surveys, Patrols, and Repairs | 11, 12 System Improvements | 12

Emergency Planning and Response | 13 Background | 13 Planning and Response | 13 External Training and Outreach | 14 Safety-Enhancing Technology | 14, 15

Pipeline Safety Enhancement Plan | 16 Background | 16 Plan Fundamentals | 16 Pipeline Integrity | 16, 17 Outreach and Communication | 17

Organizational Changes | 18 Background | 18 Improved Staffing and Organizational Clarity | 18 Training the Future Workforce | 18

Additional Safety Improvements | 19 Policies and Procedures | 19 Gas System Improvements | 20 NTSB Recommendations | 20, 21

Table of Contents

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→ PG&E is on a mission to become the safest, most reliable gas company in the U.S.: We will get there with Gas Safety Excellence – PG&E’s safety management system designed to improve safety, manage risk, and drive continuous operational improvement. Gas Safety Excellence requires every employee to understand how his or her work makes our system safer, more reliable and more affordable.

→ We’re responding to gas odor calls faster than ever: In June 2013, employees responded to calls in less than 60 minutes 99 percent of the time, and in less than 30 minutes 84 percent of the time – the average response time was 21.8 minutes. PG&E now ranks in the top quartile for gas utilities nationally based on industry benchmarking information.

→ We’ve closed out seven of 12 NTSB recommendations: Of the 12 safety actions recommended by the NTSB following the San Bruno accident, PG&E has completed seven. In June, we requested closure on two additional NTSB recommendations related to integrity management. When the NTSB signs off on those, we will have three more to complete, all of which are well under way.

→ We’ve made significant progress on our Pipeline Safety Enhancement Plan: Since the program began in 2011, we have validated 485 miles of transmission pipeline, including 376 miles validated through hydrostatic pressure testing; replaced 59 miles of transmission pipeline; automated 78 valves; and collected and digitized more than 3.5 million pipeline records, which includes validating the Maximum Allowable Operating Pressure for 100 percent of our gas transmission system.

→ We’re investing more in hiring and training: We have hired more than 1,000 new employees into all levels of the Gas Operations organization since January 2011, and expect to hire even more through 2014. More than 131 new training courses have been created for gas employees, including leak repair, Locate and Mark, and ground patrol.

→ We’re using new tools and technology: In June 2013, we supplied 400 ruggedized laptops to gas construction crews, providing them with real-time access to detailed maps of our underground gas system. PG&E also partnered with 3P Services to develop a cutting-edge “smart pig,” customized for PG&E’s gas system, providing an efficient, accurate way to assess the internal condition of its pipelines. Finally, PG&E became the first utility to use Picarro’s car-mounted natural gas leak detection device – the world’s most advanced leak detection tool.

→ We’re mapping and surveying the centerlines of all transmission pipelines: We are using GPS coordinates to map the centerline of all 6,750 miles of gas transmission pipeline and then clearing any vegetation or structures that could interfere with our ability to maintain, inspect and safely operate them. Having such precise maps allows PG&E to work more efficiently with first responders and improves our ability to identify and manage risks.

→ We’re building a cutting-edge gas control center: Opening in August 2013, PG&E’s new 42,000-square-foot control center will have transmission, distribution and dispatch operators working side-by-side 24 hours a day, seven days a week. This increases our visibility and control of the gas system, and our ability to operate efficiently and effectively in normal, abnormal and emergency operating conditions.

Highlights

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Background PG&E encourages employees and contractors to report and act on safety concerns, strengthening its culture of safety and accountability. This includes fostering an environment where essential behavioral changes can occur at all levels. We are setting clearly defined goals and expectations, structuring incentives to align with those goals, measuring progress using industry benchmarks, and effectively communicating with customers, employees, regulators and the communities we serve. Management Focus Goal: Expand and enhance management’s focus on recognizing public and employee safety as a primary goal. To achieve this goal: • PG&E’s public- and employee-safety metrics account for 40 percent of the company’s

goals, which are the most significant of all measures • Clear procedures and guidelines have been set to ensure all work is conducted in a safe

manner • 90 new gas crew trucks were put into service, designed with input from hundreds of

employees o New upgrades include roll-up side compartments giving crews safer access to tools

while parked on busy streets and a loading device to assist with heavy equipment o Over the next three years an additional 40 trucks are expected to be deployed

• Employees are recognized internally and publicly when they come forward with operational issues that may have safety implications

• Internal escalation processes were revised to ensure that customer concerns are addressed quickly and effectively

• Best practices and protocols were developed through participation in the industry-wide American Gas Association Pipeline System Safety Initiative

Public Outreach and Communication Goal: Demonstrate PG&E’s commitment to open, honest communication, transparency and public safety.

To achieve this goal, PG&E: • Added detailed gas system and safety information to its public Website, PGE.com,

including the locations of its gas transmission lines • Partnered with first responders, community leaders and public safety officials to greatly

increase practice drills, training programs and educational resources o In 2012, we conducted 411 workshops with first responders o In 2013, we have conducted 350 workshops, and are continuing to schedule more

• Launched a dedicated public safety Website, giving first responders online access to valuable pipeline data, including pipeline location, pressure, and other component-level information: http://www.pge.com/mybusiness/edusafety/firstresponder/

• Mailed letters and gas safety pamphlets to more than two million homes and businesses located within 2,000 feet of a PG&E-owned gas transmission pipeline

• Piloted a pipeline safety campaign directed at all schools within our gas-distribution service area

o Sent information or held in-person meetings with school administrators to discuss pipeline locations, safety awareness and gas emergency preparedness

Safety Culture

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Quality and Improvement Goal: Develop a culture that is dedicated to performing the safest, highest quality work in every aspect.

To achieve this goal, PG&E: • Implemented stringent quality controls, and monitors and measures field work to ensure it is

done to the highest standard. Quality control teams are in the field: o Evaluating completed gas leak repairs o Re-surveying pipeline sections immediately after initial leak surveys have been

completed to ensure results are thorough and accurate o Visiting customers’ homes after Gas Service Representatives have finished repairs to

ensure all work was done to the highest standards o Re-excavating field work to inspect and evaluate work quality through PG&E’s Re-Dig

program o Evaluating Locate and Mark field work

Our May 2013 pass rate for Locate and Mark assessments was 73 percent, compared to 35 percent when the program began in 2011

Locate and Mark assessments are based on a scorecard evaluating a variety of factors, including accuracy of mark, correct marking designation and proper instrument calibration

• Developed a new Corrective Action Program to: o Log system failures and incidents, and conduct in-depth analyses to determine root

cause o Identify corrective and preventative actions for improvement, and monitor those

actions for effectiveness • Launched a new online tool for employees, currently being tested, that allows real-time, on-

site incident reporting and analysis

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Background

In order to become the safest, most reliable gas company in the United States, PG&E must know as much as possible about our physical assets so that we can effectively manage risk and improve performance.

Asset Management Policy Goal: Provide a holistic view of asset management, promote the key components of our business and encourage a continuous improvement philosophy. In working toward this goal, PG&E: • Created a new 14-point asset management policy that clearly states how we intend to

manage our business and our assets o The asset management policy provides the framework for the creation of our asset

management plans, which detail how we will manage our assets and reduce risk across our eight asset families

o The asset management policy is the way we want to run our business. It tells all of our stakeholders – from our contracting partners to our regulators – that we are serious about the safety, reliability, and affordability of our gas system

Data Management and Coordination Goals: Meet and exceed the National Transportation Safety Board’s recommendation for a “traceable, verifiable and complete” records standard for the gas industry. Ensure PG&E’s gas records are maintained in an efficient, standardized fashion across the business. Develop a system where maintenance data is managed in a smarter way, automatically cross-checking information across the gas system. In working toward this goal, PG&E: • Created a Records and Information Management organization in 2012 to manage PG&E’s

implementation of standard recordkeeping practices o Promoting transparency and accountability for record keeping, protecting vital records

and disaster planning documents, and improving records-retention practices • Retrieved, scanned, and uploaded more than 3.5 million paper documents, digitizing paper

records into electronic files going back more than 50 years • Upgraded the “chain of custody” in the SAP system to track pipeline removal from

conception through testing and disposal • Launched the Gas Transmission Asset Management program – now known as “Mariner” –

as part of its Pipeline Safety Enhancement Plan (PSEP), which significantly improved PG&E’s records and information management system. Mariner’s primary objectives are:

o Facilitate PG&E’s continued transition from reliance on paper records Offer electronic forms and automated, optimized scheduling functions on

mobile devices o Increase data accuracy through consolidation of data into a robust management

system Provide traceable, verifiable and complete asset information in an

integrated system Receive real-time system updates, and automate risk analysis and ranking

o Integrate gas transmission leak information and other historical pipeline records into a single electronic database

Asset Management and Maintenance

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This includes scanning all paper records and confirming their accuracy and completeness before converting the information to an electronic database; the information will then be linked to PG&E’s Geospatial Information Systems (eGIS) mapping database for analysis

• Launched the Gas Distribution Asset Management program – now known as “Pathfinder” – to improve the quality of and access to information in PG&E’s distribution records. o Deploying a Geographical Information System (GIS) tool to map, reconcile and

analyze the data and events that take place during work on PG&E facilities o Launched pilot program and provided employee training in the Peninsula Division in

February 2013 Converted 709 electronic maps covering over 2,000 miles and 186,000

services to the GIS tool; as a result, PG&E identified and addressed more than 60,000 data discrepancies as of February 2013

Conversions to GIS are in progress for East Bay, Sacramento and San Francisco divisions, and will be deployed in those areas by the end of 2013

o Finalizing logistics to begin scanning all Gas Service Records and collecting the critical attributes to be put into GIS

o Developing a comprehensive training and onsite support system for supervisors, mappers and other team members in the East Bay, Sacramento and San Francisco in preparation for local GIS deployment in November and December 2013

Technology Upgrades Goal: Transform Gas Operations into a highly-efficient organization through the use of modern tools and technologies. To achieve this goal, PG&E: • Supplied 400 ruggedized laptops to gas construction crews giving them real-time access to

digital transmission and distribution pipeline maps and new eGIS and GIS tools o Approximately 60 percent of work forms have been converted from paper to

electronic format to improve emergency response • Deployed more than 300 tablet computers to field employees, making real-time data and

pipeline maps instantly accessible • Became world’s first utility to use Picarro’s car-mounted natural gas leak detection device,

which is much more sensitive than traditional instruments • Introduced a new wireless, self-propelled pipeline inspection tool in February 2013 that can

detect potential small pipeline fractures and bad welds • Increased use of high-definition cameras and high-tech devices called “smart pigs” to

inspect the internal condition of many pipelines, with 360 degrees of visibility • Increased use of aerial technology on helicopters to survey our pipeline system, especially

in more remote and rugged areas • Rolled out an advanced leak-detection instrument called Detecto Pak-Infrared (DP-IR) that

uses infrared technology to pinpoint methane gas leaks without false alarms caused by other gases; this technology can detect and grade leaks at the same time

• Completed dispatch system upgrades to improve arrival times of Gas Service Representatives (GSRs) responding to service calls.

o In June 2013, GSRs continued to excel in response time, achieving arrival on-site within 60 minutes 99 percent of the time and within 30 minutes 84 percent of the time - the average GSR response time was 21.8 minutes

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Class Location Verification Program Goal: Ensure that PG&E’s class location information for gas transmission pipelines is kept current, and implement enhancements to our procedures and training to maintain this commitment going forward. To achieve this goal, PG&E: • Conducts an annual system-wide review of transmission pipeline class location

designations; this year’s assessment is scheduled for completion in October, 2013 o Analyzes approximately 5,700 miles of transmission pipeline to identify potential

changes in designation o If any pipeline segments are determined as operating out of class, one or more of the

following measures are taken: Maximum Allowable Operating Pressure (MAOP) of the pipe is reduced Hydrostatic pressure tests are conducted to restore original MAOP Pipeline segments are replaced, if necessary

o Informs the CPUC’s Safety and Enforcement Division of system-wide review findings • Designated the Senior Director of Asset Knowledge Management as the person with

ownership and accountability for keeping class locations current • Revised the standards and procedures for pipeline patrolling and continuous surveillance of

class locations, and implemented new guidelines for aerial patrols and reporting • Increased and enhanced employee training on all class location procedures and reporting

methods

Mapping Goal: Increase the accuracy and quality of maps, and the timeliness of those completed in the field, also known as “as-builts.” To achieve this goal, PG&E: • Achieved a nine-day average for completing the Mapping portion of asset documentation in

2012 • Increased staffing of the Mapping organization • Reduced the mapping backlog by 93 percent in 2012

o By December 31, 2012, every job on the backlog was less than 21 days old • Focused on reducing the cycle time between Construction Completion in the field and

Mapping in the system o Targeting a cycle time of 90 days or less by the end of 2013 o Improving the overall as-built process through focused training for operating and

clerical personnel o Created a standardized, as-built checklist for job packages from the field

Trained hundreds of employees on how to use the new process Conducts quality checks in the field to ensure the necessary documents are

entered into the system and scanned appropriately

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Background PG&E is improving its Gas Operations Risk Management program to better identify potential risks and apply mitigation strategies more efficiently.

Risk Management Goal: Improve the methods used to identify and evaluate any risk that could negatively impact the safety or integrity of our gas system, or our ability to work efficiently and manage costs. Fully integrate the risk management process and address risks early to minimize potential issues. To achieve this goal, PG&E: • Completed a benchmarking study that identified best practices for risk management in the

utility, finance, and energy industries o Worked with leading industry consultants to develop a roadmap to achieve best-in-

class risk management practices • Is developing risk management as a core competency among employees

o Risk managers are in place to ensure rigorous, thoughtful analysis of risks in each line of business

• As part of PG&E’s gas asset management system, identified eight asset families o Designated asset family owners and risk champions to oversee the physical assets

for each of these families Transmission pipeline Distribution Mains and Services Customer-Connected Equipment Compression and Processing Gas Storage Measurement and Control Compressed Natural Gas (refueling Stations) /

Liquefied Natural Gas (portable supply) • Established a Risk Charter and the Gas Operations Risk Compliance Committee in 2012,

which meets monthly to discuss risk management activities, compliance programs, audit procedures and safety-related matters

• Held several risk assessment workshops with subject-matter experts in 2012 and 2013 to identify operational and compliance risks

• Validated the identified operational risks against industry standards in 2012 • Developed a new, more granular risk scoring system, integrated with Investment Planning,

to determine likelihood and consequence of failures in Gas Operations • Performed mitigation analysis on Gas Operations potential areas of risk • Established Key Performance Indicators (KPIs) to measure the effectiveness of the

mitigations and programs • Developed standards and procedures for Gas Operations risk management framework and

process • Identified and communicated the top operational and compliance risks to employees

o Developed fact sheets specific to each asset family to educate employees that work on them, including specific risks and mitigation strategies

Risk Management

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Background PG&E is enhancing its Integrity Management program and supporting systems through a detailed review of program policies, procedures and tools.

Transmission Integrity Management Program Goal: Update policies and procedures of PG&E’s Transmission Integrity Management Program (TIMP) to exceed industry standards and adopt best practices for pipeline operation and maintenance. To achieve this goal, PG&E: • Implemented integrity management principles beyond pipelines in high consequence areas

(HCAs) that have already been addressed, including: o Monitoring localized, slow-moving land masses and their interactions with pipelines o Surveying soil movement and land mass changes o Supplementing and refining existing internal corrosion control program by

implementing industry best-practices o Developing an improved risk analysis model using integrated software that provides

real-time risk analysis across the transmission pipeline system o Developing a shallow-pipe program to collect data on pipeline depth during normal

patrols, and centerline surveys being conducted via the Pipeline Pathways program o Implemented a fault-crossing study, monitoring and remediation program o Implemented a fracture-control plan to identify any changes in longitudinal seam

stability • Continues to work with industry-leading consultants to enhance integrity management

processes o Conducted industry benchmarking assessment and upgraded procedures to reflect

industry best practices • Conducts monthly aerial “reliability” patrols of its intrastate pipeline system that carries gas

supplies into California from the Oregon and Arizona borders • Increased aerial patrols of all HCA pipeline segments to twice a month • Completed baseline integrity assessments of all HCAs in 2012 according to regulatory

requirements • Started the next round of integrity reassessments (to be repeated in seven-year intervals) • Identified more than 1,600 miles of transmission pipeline to be retrofitted to accommodate

in-line inspection tools (or “smart pigs”) by the end of 2014 o Completed analysis of nearly 2,500 additional miles of pipeline in January 2013 for

upgrades o Currently developing, in conjunction with German firm 3P, an in-line inspection tool to

be used with low-flow, low-pressure pipelines

Gas Pipeline Replacement Program Goal: Replace aging cast iron, steel and copper distribution lines with modern plastic pipe that is more flexible, corrosion resistant and reliable during earthquakes.

To achieve this goal, PG&E:

• Continues to enhance the integrity of its distribution system through the Gas Pipeline Replacement Program (GPRP), launched in 1985.

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o A total of 2,213 miles of cast iron and pre-1940 distribution main have been replaced, as of December 31, 2012

o An additional 176 miles of distribution main have been identified for replacement by 2015

• Recent accomplishments: o In 2012, GPRP replaced more than 26 miles of distribution main o For 2013, GPRP plans to replace more than 32 miles of main,

including 5,500 associated services o GPRP has identified more than 60 miles of main for replacement in

2014 Distribution Integrity Management Program Goal: Analyze PG&E’s distribution system holistically through this new program designed to enhance operations and enhance the overall safety of the gas distribution system. To achieve this goal, PG&E is:

• Analyzing and replacing Aldyl-A plastic pipelines throughout the system: o Replaced 25 miles of Aldyl-A pipeline in 2012 o Identified 57 miles of Aldyl-A pipeline for replacement in 2013, and 100 miles for

replacement in 2014 o Updated the GIS mapping system with information on more than 5,600 miles of Aldyl-

A pipeline, including detailed pipeline and service attribute information o Increased the company’s ability to identify, evaluate, and rank Aldyl-A issues by

working with third-party experts to update risk algorithm The company has implemented the first iteration of the risk algorithm and has

completed the second version • In this next version, PG&E plans to enable comparison of issues across

materials – from Aldyl-A plastic to steel • Video inspected more than 8,000 sewer laterals in 2012 to confirm that previous gas

replacement work did not damage adjacent sewer lines o Making progress on the company’s goal to video inspect 25,000 sewer laterals by the

end of 2013 • Implemented a process to solicit feedback from PG&E field crews regarding the condition of

the gas distribution system

Leak Surveys, Patrols, and Repairs Goal: Increase monitoring of the gas system to find and repair leaks more quickly and efficiently than ever before and keep our open leak workload at record-lows. To achieve this goal, PG&E:

• Reduced the leak workload o Repaired more than 4,300 Grade 2 leaks thus far in 2013 and are forecasting more

than 11,000 additional leak repairs through the end of 2013 o In the second half of 2012, repaired more than 7,200 Grade 2 leaks, including 100

percent of all Grade 2 leaks that were identified in 2011 o By the end of 2013, PG&E anticipates the backlog of all Grade 2 leaks will be

reduced to an all-time-low of 1,000 or less • Accelerated repairs of above-ground Grade 3 leaks on the distribution system

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• Goal is to repair all above-ground Grade 3 leaks by the end of 2013, even though only a re-check is required by regulation

• Continues to repair trace leaks at customer gas meters even though they are non-gradable, very minor, and not required to be repaired by regulation o Repaired 50 percent of all meter-set leaks in 2012 with all currently known meter-set

leaks to be repaired by the end of 2013 o Going forward in 2014, all newly-identified meter-set leaks will be repaired within

three months of identification System Improvements Goal: Enhance system infrastructure and operations to enhance public safety and response to abnormal conditions and emergencies. PG&E is demonstrating progress by: • Rebuilding or replacing approximately 4,700 high-pressure regulators and 1,000 district

regulator stations o Rebuilt or replaced 1,018 high-pressure regulators and district regulator stations in

2012 o Plans to rebuild or replace 1,050 units in 2013

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Background PG&E is reviewing and restructuring its emergency plan with a focus on standardization, integration with external agencies and the implementation of industry-leading best practices.

Planning and Response Goal: Enhance the company’s Gas Emergency Response Plan (GERP) to reflect industry best practices and National Transportation Safety Board recommendations. To reach this goal, PG&E:

• Contacted ~25 other utilities and first responder agencies to identify best practices and industry standards, and benchmarked against other leading utilities in 2011 o Continues to benchmark against other emergency preparedness programs and

enhance the GERP o Participated in a best-practices symposium with Consolidated Edison, PSE&G and

approximately 20 other utility companies in May 2013 • Established a Gas Operations emergency preparedness team in 2012, focused on three

areas: (1) field delivery, (2) emergency planning, and (3) performance and compliance. This team has:

o Clearly defined roles and responsibilities o Defined emergency scenarios with three incident-severity levels and corresponding

response plans o Expects to publish a revised, annually-updated GERP in August 2013 – the first

integrated transmission and distribution response plan of its kind in its third iteration • Created a mobile application that includes the GERP for PG&E first responders, which is

currently being beta tested by the Gas Emergency Preparedness department • Created a dedicated team to oversee gas emergency planning, support, and training which:

o Meets regularly with local governments and agencies o Provides free, regionally-based emergency response training to fire departments and

agencies within PG&E’s service area o Designs and manages internally-focused emergency response and public-safety

programs and training o Continuously evaluates PG&E’s emergency response and public safety efforts

• Participates in safety-related conferences o PG&E presented at the Western Energy Institute emergency preparedness and

response symposium in May 2013 • Presented at the American Gas Association Disaster Mitigation Symposium held in Atlanta,

Georgia in June 2013 • Participated in SGA Webinar on public safety, training and outreach efforts in June 2013

PG&E also: • Established a Distribution Gas Control Center that is co-located with the Transmission Gas

Control Center and Gas Dispatch to provide focused monitoring of the gas distribution system

• Implemented new emergency response tools and processes that enable better coordination and an integrated response to pipeline incidents with improved information sharing and decision making

Emergency Planning and Response

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External Training and Outreach Goal: Partner with first responders and public safety officials across the service area to enhance emergency preparedness training programs. To achieve this goal, PG&E: • Conducted two full-scale mock emergency scenario exercises in 2012 • Completed two full-scale mock exercises in 2013, and expect to complete another four by

year-end o Adding new emphasis on partnering with the volunteer firefighting community and

community leaders • Facilitated more than 400 first responder workshops in 2012; planning 500 in 2013 • Completed 22 tabletop exercises in 2012 and five in 2013, with plans to complete another

19 by the end of the year • Continue to develop and deploy training simulation tools to prepare Gas Operations for

potential pipeline-rupture scenarios • Developed a comprehensive contact list in 2012 for all local first responders to improve

communication during an emergency • Conducted CAISO Gas Curtailment Exercise in 2012 • Provided pipeline maps, GIS data, and other critical information to first responders • Continues to complete ongoing, improved Incident Command System (ICS) training

o Launched a gas-specific ICS course o Revised annual GERP training to include ICS components

• Improved handling process for incoming emergency calls to efficiently dispatch Gas Maintenance and Construction personnel, Gas Service Representatives, and other first responders to the scene of a natural gas emergency

Safety-Enhancing Technology Goal: Embrace new tools and technology to increase emergency planning and response capabilities.

To achieve this goal, PG&E: • Added six new Mobile Command Center vehicles to its fleet, packed with the tools crews

need to address emergencies from the field, including: o A 3,000-watt on-board generator o Three workstations equipped with laptops o Satellite phones, radios, and a radio controller that allows PG&E to communicate with

other first responder agencies, such as police, fire and highway patrol • Developed an online portal for first responders, giving them secure access to transmission

pipeline maps, valve locations and attribute data o In 2012, added the entire revised GERP and a contact list for both sides of the

emergency response team • In 2012, created online training classes for first responders accessible via PG&E public

website: www.pge.com/firstresponder • Created “Teaming Up for a Safe Response” videos demonstrating how agencies respond to

gas emergencies in urban and suburban areas o Videos are being distributed to external first responders by PG&E’s Public Safety

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• Is piloting a mobile app for use on iPads and iPhones that will allow PG&E employees and first responders to view the revised GERP in its entirety while in the field

• Is continuously reviewing and improving emergency response procedures to ensure our systems and operations will run as smoothly as possible in the face of a major disaster

o In 2013, this team will integrate its line of business continuity plan and GERP to ensure a smooth transition from one plan to another should an event escalate

Created five specific Emergency Operations Center (EOC) teams manned with gas technical experts year-round in case of a gas related emergency; these teams train and practice roles and responsibilities together as part of ongoing efforts to engrain emergency preparedness throughout gas operations

• Adding remote pressure-monitoring technology at approximately 5,000 locations within the gas distribution system over a five-year period o This will increase Gas Control Center visibility of the distribution system to 95 percent,

allowing for early detection of abnormal conditions and the ability to take a proactive approach to reducing emergency events

• Installing tools and technology in the combined transmission and distribution Gas Control Center which provide improved situational awareness and intelligence of potential risks

• Installing “smart board” technology in the Co-located Gas Control Center allowing interactive emergency response planning with field crews and remote technical staff

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Background In June 2011, the California Public Utilities Commission ordered PG&E and other California gas utilities to submit a plan for validating, testing or replacing its entire gas transmission pipeline system. PG&E responded with its Pipeline Safety Enhancement Plan (PSEP).

Plan Fundamentals Goal: Improve gas system safety through key infrastructure upgrades that will occur in two phases. PSEP addresses the highest priority projects in Phase 1, which runs from 2011 through 2014. PG&E has not yet developed the full scope of Phase 2. Since Work Began on Phase I of PSEP in 2011, PG&E: • Devoted nearly $1 billion to improve the gas transmission system, including

more than two million employee-hours as of January 2013 • Plans to strength test approximately 783 miles of pipeline (including confirmation

that existing strength-test records are complete and verifiable) o Completed strength testing for 522 miles of pipeline through July 31, 2013

406 miles validated through hydrostatic pressure testing 116 miles validated through previous records

• Plans to automate 228 valves on large-diameter, high-pressure pipelines located in heavily populated areas

o Automated 81 valves as of July 31, 2013 • Plans to replace 185 miles of pipeline

o Replaced 62 miles of pipeline as of July 31, 2013 • Plans to have a total of 199 miles of transmission pipeline retrofitted to accommodate in-line

inspection tools o 133 miles have been retrofitted as of July 31, 2013

• Plans to conduct a total of 234 miles of in-line inspections in 2013 and 2014 o Inspected 39 miles using in-line inspection tools as of July 31, 2013

• Continues to improve its process and schedule performance o Pipe replacement, valve automation, in-line inspection and strength-test schedulers

were combined into one team in 2013 to increase efficiency and promote consistency

o Schedule logic and durations have been modified based on 2012 benchmarking (e.g. time required to obtain permits from municipalities and agencies) and continue to be refined for 2013 projects

Pipeline Integrity Goal: Enhance the integrity of PG&E’s gas system by validating the maximum allowable operating pressure (MAOP) of transmission pipelines and conducting leak surveys and direct assessments. To achieve this goal, PG&E:

• Completed MAOP validation on all of its 6,750 miles of transmission pipeline in July 2013 • Retrieved and scanned more than 3.5 million paper documents going back more than 50

years • Completed an accelerated, comprehensive leak survey of PG&E’s entire transmission

pipeline system

Pipeline Safety Enhancement Plan

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• Completed an accelerated direct assessment survey of PG&E’s gas transmission lines in San Bruno and the distribution system in and around the neighborhood affected by the accident in 2012

Outreach and Communication Goal: Raise public awareness of gas system safety issues and capital investment projects. To achieve this goal, PG&E:

• Conducts extensive community outreach to notify and educate customers about field activities that may affect them, and answer any questions or concerns they may have o Conducts public outreach through door-to-door canvassing, door hangers, open

houses, automated calls, letters, news releases, PGE.com website, social media, 24-hour dedicated phone line, and public service announcements

o Provides customers who live near construction activities with letters, gas-safety pamphlet and fact sheets explaining the work PG&E is doing in the community

• Informs public and local government officials of schedule and progress of field work

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Background PG&E has made organizational improvements by clearly defining roles and accountability, and by strengthening our workforce with industry experts who have extensive gas utility experience.

Improved Staffing and Organizational Clarity Goal: Change PG&E’s organizational structure to improve operations and ensure that staffing levels and employee experience and expertise are aligned with operational demands. To achieve this goal, PG&E: • Separated its gas and electric businesses to create a new Gas Operations organization

with the authority, resources and mandate to improve all gas operations • Hired executive leaders who are accountable for the following areas:

o Public Safety and Integrity Management o Asset Knowledge Management o Standards and Policies o Project Engineering and Design o Investment Planning o Transmission Maintenance and Construction o Distribution Maintenance and Construction o Gas System Operations

• Hired more than 1,000 new employees and leaders in all levels of the Gas Operations organization since January 2011 and expects to hire even more in 2014

• Created a predictive model for workforce planning to identify upcoming retirements and hiring needs

• Created an Investment Planning group in 2012 to improve the process of planning, forecasting and making risk-based investment decisions

Training the Future Workforce Goal: Address the critical shortage of skilled workers and trained professionals that PG&E and utilities across the country are facing due to our nation’s aging workforce. To achieve this goal, PG&E: • Created the PowerPathway™ program, partnering with educational and workforce

investment systems, labor unions and industry employers to cultivate and prepare individuals for high demand positions at PG&E and throughout the energy industry o Initiatives include:

Faculty “train-the-trainer” programs Co-delivery of classroom instruction Program management Student field visits Program funding and in-kind donations of equipment

Organizational Changes

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Policies and Procedures Goal: Update system documentation and refine assessments of station assets to promote public safety and improve operational efficiencies, particularly during emergencies. To achieve this goal: • PG&E completed an assessment of document accuracy for every critical gas transmission

(GT) station document, including more than 5,700 drawings and manuals o PG&E is updating station documentation as necessary, and plans to have all

necessary updates completed by 2017 • Based on the documentation assessment, PG&E identified three major projects in 2013:

o Assess condition of all large, complex and simple stations, including compressed natural gas filling stations by April 2014

This project includes identifying vulnerabilities and recommending corrective actions, along with estimating remediation costs

Larger program issues that are not site-specific will also be identified o Generate and update documents to meet requirements for the safe and reliable

operation of station assets All compliance critical documents will be reviewed and updated as

necessary by year-end 2013. o Review station strength-test documentation to assess the overall health of the system

and prepare for the planned MAOP station-validation effort expected to launch in 2015

o All three projects include the development of records and information solutions, including facility assessment reports, station features lists and updated operating diagrams that will meet our standards of traceable, verifiable and complete asset records

• Established detailed procedures to improve system-wide operations: o Implemented new 911 notification procedures to ensure that PG&E immediately calls

the appropriate local emergency agency (e.g., 911) during any incident that may affect public safety, public property or the environment

• Completing the construction of a state-of-the-art Control Center using advanced technology and tools o The Gas Control Center enhances visibility of the gas distribution network and

enables control through the establishment of centralized processes for gas transmission and distribution and contingency plans for planned work

o Conducting operator training to enable expedient opening of Control Center o o Implemented new alarm-management tools and processes, which included employee

training • Continuously improving Gas Distribution and Transmission Control procedures and policies

through the Control Room Management change process o Creating instructions on automated pipeline segment shutdowns and linking them to

SCADA screens so they are readily available during emergencies • Engaging with industry experts to analyze and improve operator workflow processes and

tools to enhance situational awareness in Gas Distribution and Transmission Control Center o Developing and implementing Gas Distribution and Transmission Control operator

best practices, in addition to updated clearance processes and training

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Gas System Improvements Goal: Use new tools to gather more detailed information about our gas system and ensure access to our pipelines to improve public safety. To achieve this goal, PG&E will: • Conduct a “centerline” mapping survey of its entire 6,750-mile gas transmission pipeline

system in 2013, using highly precise mapping tools o Survey all areas above transmission pipelines, called utility rights-of-way, which are

located along residential, commercial, industrial and agricultural properties o Locate, mark and map the center of all transmission pipeline and check the area

above them for structures or vegetation that could interfere with PG&E’s ability to maintain, inspect and safely operate the pipeline

Provides easier access for maintenance, testing and monitoring of the pipelines, and enables PG&E to work more efficiently with first responders

o Having precise GPS locations of the center of a pipeline will enable PG&E to use-high-tech tools to better maintain the pipeline system

This will be important whether someone is checking on a pipeline in a computer system, doing a leak survey or patrolling in the field, either on foot or in the air using a helicopter or airplane

National Transportation Safety Board (NTSB) Recommendations Goal: Make swift and documented progress on meeting and exceeding the NTSB’s recommendations that were issued as a result of the San Bruno accident. PG&E is achieving this goal: • Completed seven of the 12 safety actions recommended by the NTSB thus far. • Requested closure on two additional NTSB recommendations in June 2013, related to

integrity management. When the NTSB signs off on those, we will have three more to complete, all of which are well under way.

• The seven completed recommendations include: o Emergency procedure: PG&E established a comprehensive response procedure to

large-scale emergencies on gas transmission pipelines. The procedure identifies a single person to assume command and specifies duties for all others involved; includes development and use of trouble-shooting protocols and checklists; and requires periodic tests or drills to show that the procedures are effective

o 911 notification: PG&E’s gas control room operators, who keep 24-hour watch of the utility’s transmission pipeline network, are now required to immediately notify the 911 call centers affected communities when a possible pipeline rupture is detected

o Toxicological tests: PG&E has revised its post-accident toxicological testing to ensure timely testing and inclusion of all employees potentially involved in an incident

o Records: PG&E conducted an intensive records search including retrieving, scanning, and uploading more than 3.5 million paper documents to meet the NTSB’s threshold for traceable, verifiable and complete records.

o Work clearance procedures: PG&E’s work clearance procedures now include the development of contingency plans for planned work on the natural gas transmission system. These new procedures will ensure accuracy and completion of clearance forms will require that specific personnel have complete knowledge of the intended work and related clearance procedures.

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PG&E’s work clearance procedures define the planning and controls that must be in place before work is performed on the gas system.

o MAOP validation: PG&E first completed MAOP validation for gas transmission pipelines running through high-consequence, populated areas, and now also has completed MAOP validation for all of its transmission pipelines.

o Public Awareness Plan: PG&E developed and incorporated written performance measurements and guidelines into its Public Awareness Plan to ensure that customers and communities receive important gas safety information

• Working vigilantly on the remaining recommendations o Of the five remaining safety recommendations, the NTSB considers

PG&E’s progress “open—acceptable pending completion”

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