1 DIMSA A Distribution Integrity Management SME Approach August – 2009.

1

DIMSAA Distribution Integrity

Management SME Approach

August – 2009

DIMSA

A Distribution Integrity Management SME Approach The Approach is predicated on

Program Performance Risk Management Programs currently being implemented are utilized to demonstrate

compliance / risk management

The Approach Includes The Written Plan Your Current Methodology for 49 CFR 192 Compliance Three Distribution Integrity Procedures

1. Program Performance Evaluation

2. Threat Specific Risk Management

3. Results Driven Improvement

This is NOT Transmission, so we will NOT treat it as such…

DIMSA Collaboration

SEMPRA Utilities SoCal Gas / San Diego Gas & Electric

Largest LDC in the country

PI Confluence Procedural Implementation Management (ICAM)

Manage Schedule Track Document Report

Your Operations

Would say your systems are safe and reliable?

Do you believe you are currently managing safety & reliability?

Are you in compliance with the requirements of 49 CFR 192?

Your Operations

Are you currently analyzing the results of your 49 CFR 192 compliance activities?

Can you correlate these results back to your incident / safety record?

Are you currently evaluating these analyses to determine the effectiveness of your programs?

Have you documented these analyses . Evaluations to support a defensible position that you are in fact managing safety & reliability?

The Premise In most cases the operators are doing the right things

to manage integrity In most cases the operators safety / reliability records

and excellent Implementing the requirements of 49 CFR 192

manages risk… It is all about demonstrating performance

Program Performance Risk Management

Programs Required by 49 CFR 192

Program Performance Risk Management Programs currently being implemented are utilized to

demonstrate risk management

Performance may be measured through the use of Key Performance Indicators (KPI)

KPI take two forms, leading and lagging Leading indicators refers to the measurement of the effort Lagging indicators refers to the measurement of the results


Risk Evaluation / PrioritizationCorrosion

Risk Evaluation / PrioritizationExcavation

Risk Evaluation / PrioritizationOther Damage

Risk Evaluation / PrioritizationNatural Forces

Risk Evaluation / PrioritizationMaterial / Weld Failure

Risk Evaluation / PrioritizationEquipment Failure

Risk Evaluation / PrioritizationInappropriate Operations

Quote from Texas Railroad Commission

“Operators are sleep walking thru the rule”

They are performing the requirements of 192 They are capturing the required data They are NOT looking at the data They are not improving based on the results


The Plan Objective State the company positions Formalize program descriptions Analyze and Evaluate program performance Correlate results to safety Take credit where credit is due Improve IF and WHERE necessary

Statistics

Over 91% of significant incidents are caused by other outside force damage, excavation damage and other causes.

PHMSA currently defines a significant pipeline incident as those reported by pipeline operators when any of the following conditions are met:

fatality or injury requiring in-patient hospitalization $50,000 or more in total costs, measured in 1984 dollars highly volatile liquid releases of 5 barrels or more or other liquid

releases of 50 barrels or more liquid releases resulting in an unintentional fire or explosion

Statistics

PHMSA Significant Incident Data 2008

2008 Gas Distribution Incident Causes

# of Significant Incidents

% of Total Significant Incidents

Other Outside Force Damage 45 43.69%All Other Causes 27 26.21%Excavation Damage 13 12.62%Natural Force Damage 8 7.77%Human Error 4 3.88%Material Failure 4 3.88%Corrosion 2 1.94%Total 103 100.00%

Damage of various types accounts for 65% of the significant incidents with all other causes adding another 26%.

PHMSA Reported Significant Incidents Nation Wide for 2008

43%

26%

13%

8%

4%4% 2%

Other Outside Force Damage

All Other Causes

Excavation Damage

Natural Force Damage

Human Error

Material Failure

Corrosion

Reality Check

SO WHAT THREAT SHOULD WE BE FOCUSING OUR ATTENTION ON???

The Various

Types of DAMAGE


10 /17 Programs address Damage in one way or another

Leak Survey and Leak Prioritization Metallic Leak Repair Plastic Leak Repair Damage Prevention Public Awareness Pipeline Patrol Corrosion Control Land Movement Management Main and Service Replacement Bridge and Span Inspections


EACH of these 10 programs includes risk based aspects that support program performance risk management

More frequent patrols in populated areas More frequent leak surveys in area with higher

consequence Repairs of leaks prioritized by consequence

Going Forward

How are you going to take what you are currently doing, formalize it, analyze it, evaluate it and then correlate it back to your safety record?

How are you going to demonstrate compliance and that your safety and reliability objectives are being met today?

How will these same objectives be met in the future?

A Program Performance Risk Management Approach

The Written Plan is new

Programs are already being implemented

Analysis, Evaluation and Improvement is new


The Written Plan will include sections that outline your position on each element of the rule

System Knowledge Threat Identification Risk Evaluation / Prioritization Actions to Address Risk Performance Measures Plan Effectiveness / Improvement Reporting


A Different View of the Elements

However, Program Performance Risk Management takes a slightly different approach

Performance Measures are detailed prior to Risk Evaluation and Prioritization

Performance of the programs will be utilized to document that risk is being managed

Actions to Address Risk will be combined with Improvement These additional actions will be a means of improving the plan Plan improvement includes program modifications to enhance performance

Plan Effectiveness is rolled up into performance. Performance is the how we measure plan effectiveness through the

demonstration of risk management Performance against threats Performance against their associated consequences

System Knowledge

The Program Performance Risk Management approach includes formalized program descriptions which detail the data collected by each program and how this data supports an understanding of the system

Additionally, the position on System Knowledge will describe the existence of other data sets, such as historical records, that also demonstrate the operators knowledge of their system

Threat Identification

The Program Performance Risk Management approach includes formalized program descriptions which detail how each program supports the identification of various threats to the system and where in the system they have a higher probability


DIM Programs Corrosion Natural ForcesExcavation

DamageOther Outside Force Damage

Material or Weld Failure

Equipment Malfunction

Inappropriate Operation

Leak Survey and Leak

Prioritization (Grading) [192.723] TI TI TI TI TI TI TI

Pipeline Patrol [192.721] TI TI TI TI

Plastic Pipe Management [192.59 and

192.311] TI

Bridge and Span Inspections [192.479 - 192.481] TI TI TI TI TI

Equipment Inspections [192.731 - 192.749] TI

Internal Operations Audit

[192.1007(f)] TI

Operator Qualifications

[Subpart N] TI

Drug and Alcohol [Part 199] TI


DIM Programs Corrosion Natural ForcesExcavation

DamageOther Outside Force Damage




TI= Threat Identification 2 3 2 3 3 4 4

The Program Performance Risk Management approach takes advantage of the fact that, at a minimum, there are 2 - 4 programs utilized to identify each threat and the locations where they may have a higher probability.

Performance Measures

Performance may be measured through the use of Key Performance Indicators (KPI)

KPI take two forms, leading and lagging Leading indicators refers to the measurement of the effort Lagging indicators refers to the measurement of the results

The premise of a performance based approach is that if the efforts are defined so as to generate the optimal results, and these efforts are in fact implemented, then the desired results will be a byproduct


The Quality Control Bill of Rights states that

The right person Will do the right job At the right time In the right place The right way In order to achieve the Right Results


Required by the Rule Lagging

Measurement of Results

Optional to the Operator Leading

Measurement of Efforts Implementation Data Management Data Analysis Follow Up Actions Incident Mapping


The basic implementation of EVERY program is the first and primary performance indicator.

If results indicate that performance of the program is not effective then the first analysis has to be … was the program properly implemented pursuant to its procedure

The programs must be properly implemented prior to the determination that any improvement might be required


The Program Performance Risk Management approach requires that each program be defined in terms of its ability to provide leading and/or lagging performance indicators.

These indicators, when measured will be used to determine the effectiveness of each program in terms of its ability to manage threats and their associated consequences

Through the management of threats and their associated consequences, we will be successfully managing risk


The programs required by or that may have been implemented in support of 49 CFR192 provide either leading or lagging indicators

DIM Programs KPI TriggersMetallic Leak Repair [192.309 and 192.703] Lagging Plastic Leak Repair [192.311 and 192.703] Lagging

Damage Prevention [192.614] Lagging Main and Service Replacement [192.311,

192.483 and 192.487] Lagging Internal Operations Audit [192.1007(f)] Lagging

Operator Qualifications [Subpart N] Lagging Drug and Alcohol [Part 199] Lagging

Emergency Planning [192.615] Lagging EFV Program [192.381] Lagging

Public Awareness [192.616] Leading Education

Pipeline Patrol [192.721] LeadingInspection / Survey

Land Movement Management [192.317] LeadingInspection / Survey

Corrosion Control [Subpart I] LeadingInspection / Survey

Plastic Pipe Management [192.59 and 192.311] Leading Repair

Bridge and Span Inspections [192.479 - 192.481] Leading Repair

Equipment Inspections [192.731 - 192.749] Leading RepairLeak Survey and Leak Prioritization

(Grading) [192.723] Leading / Lagging Repair


Since leading indicator programs do not directly provide any measurable data that has value, their performance will be measured based on the actions they trigger.

DIM Programs KPI TriggersLeak Survey and Leak Prioritization

(Grading) [192.723] Leading / Lagging RepairPublic Awareness [192.616] Leading Education

Pipeline Patrol [192.721] LeadingInspection / Survey

Land Movement Management [192.317] LeadingInspection / Survey

Corrosion Control [Subpart I] LeadingInspection / Survey

Plastic Pipe Management [192.59 and 192.311] Leading Repair

Bridge and Span Inspections [192.479 - 192.481] Leading Repair

Equipment Inspections [192.731 - 192.749] Leading Repair


For example – a line patrol may determine the there was recent excavation in an area. This discovery would lead to further inspection of the area or possibly a new leak survey to determine if the pipeline was damaged

The performance measure is how many times were these types of conditions discovered and how many times were they acted on

If it can be show that in100% of the cases, if conditions were discovered that indicated potential damage to the system, action was taken to mitigate, then the program is being proper implemented and the leading indicators favorable reflect performance


Lagging indicator programs provide measurable data that has value and their performance will be measured based on these results.

For example – leak surveys allow us to determine the number of leaks, which is a lagging indicator because they already exist. One measure of the effectiveness of the integrity plan is whether this number is improving

The leak survey program also provides a leading indicator in that we are able to determine how many leaks found (grade 1 or 2) triggered the action of repair

If 100% of the grade 1 leaks are repaired immediately and 100% of the grade 2 leaks are addressed according to policy, then the leading performance indicator would suggest that the program was effective AND if the number of leaks by grade was trending downward, then the lagging performance indicator would suggest that the program was effective


In ALL cases, these performance measures may be utilized to manage threats or their associated consequences.

For example – by providing the leak grade information the leak surveys allow us to manage the consequences since by definition the grade is a function of the nature of the release

Regardless of the threat that may have contributed to the leak, the grading system allows us to trigger repairs.

These repairs allow us to determine and manage the root cause threat


Program Performance Risk Management begins with the evaluation of each program in terms of its effectiveness in managing specific threat and/or their associated consequences.

For each program the leading and lagging indicators will be defined and measured

The measurements will weighted in relation to the program and threat where applicable

On a program by program basis, the performance measures will be utilized to rank the program effectiveness in addressing each threat

The following table shows each program and the threats and/or consequences it manages


DIM Programs CorrosionNatural Forces

Excavation Damage

Other Outside Force

Damage

Material or Weld

FailureEquipment Malfunction


Public Awareness [192.616] CM TM / CM TM / CM CM

Pipeline Patrol [192.721] TM TM TM TM TM TM TM

Land Movement Management [192.317] TM / CM Plastic Pipe Management [192.59 and 192.311] TM Bridge and Span Inspections [192.479 - 192.481] TM TM Equipment Inspections [192.731 - 192.749] TM

Corrosion Control [Subpart I] TM Leak Survey and Leak Prioritization (Grading) [192.723] CM CM CM CM CM CM CMMetallic Leak Repair [192.309 and 192.703] TM TM TM TM TM TM TMPlastic Leak Repair [192.311 and 192.703] TM TM TM TM TM

Damage Prevention [192.614] TM TM Main and Service Replacement [192.311, 192.483 and 192.487] TM TM

Internal Operations Audit [192.1007(f)] TM

Operator Qualifications [Subpart N] TM

Drug and Alcohol [Part 199] TM

Emergency Planning [192.615] CM

EFV Program [192.381] CM CM

Risk Evaluation / Prioritization

The Program Performance Risk Management approach includes formalized program descriptions which detail how each program is being utilized to manage specific threats and the consequences associated with a failure whose root cause was that threat.

The management of threats and their consequences, supports the management of risk, with the objective being to demonstrate the safety and reliability of the system.


Risk is managed, on a threat by threat basis relative to the specific areas where the program data substantiates that the probabilities are higher and/or the consequences are greater

If You Manage Threats & If You Manage Consequences….

You are Managing Risk

Risk Evaluation / PrioritizationDIM Programs Corrosion Natural Forces Excavation Damage


Material or Weld Failure Equipment Malfunction


Public Awareness [192.616] CM TM / CM TM / CM CM

Pipeline Patrol [192.721] TM TM TM TM TM TM TM

Land Movement Management [192.317] TM / CM

Plastic Pipe Management [192.59 and 192.311] TM

Bridge and Span Inspections [192.479 - 192.481] TM TM

Equipment Inspections [192.731 - 192.749] TM

Corrosion Control [Subpart I] TM

Leak Survey and Leak Prioritization (Grading) [192.723] CM CM CM CM CM CM CM

Metallic Leak Repair [192.309 and 192.703] TM TM TM TM TM TM TM

Plastic Leak Repair [192.311 and 192.703] TM TM TM TM TM

Damage Prevention [192.614] TM TM

Main and Service Replacement [192.311, 192.483 and 192.487] TM TM Internal Operations Audit [192.1007(f)] TM

Operator Qualifications [Subpart N] TM

Drug and Alcohol [Part 199] TM

Emergency Planning [192.615] CM

EFV Program [192.381] CM CM


DIM Programs Corrosion Natural Forces Excavation Damage





TM= Threat Management 5 4 5 6 5 3 6

CM= Consequence Management 1 4 3 3 1 2 1

The Program Performance Risk Management approach is predicated on the fact that there are, at a minimum 3 - 6 programs utilized to manage each threat and 1-4 programs utilized to manage the associated consequences of these threats.


Risk Management is demonstrated by through the aggregated evaluation of each program performance metric as it applies to any given threat. Total threat score is determined Performance is measured on the threat score range for the

specific threat Improvement is driven by the results

No review / improvement required Consider review / improvement Review / improvement required

Implement Improvement Procedure

Address Risk

Considering the fact that the Program Performance Risk Management is program centric, the contention is that the programs themselves are currently managing risk

Address Risk

The program performance evaluation results will serve as the drivers for both Additional Actions as well as Improvement

These additional actions / improvement may include Plan Improvement Program Improvement Physical Improvement Regulatory Improvement

Plan Improvement

The Plan will be reviewed for effectiveness Modify Positions

Update approach Update policy Update requirements by states or feds

Modify Programs Data Gathering Requirements Frequency Procedure

Modify Procedures Program Performance Evaluation Risk Management Improvement

Program Improvement

Program Improvement – as required existing programs may be modified. These modifications may be made to any of the aspects of the formal description detailed in the next section. However, the expected modifications if any will be primarily in terms of the frequency and the data collected. A secondary change might be the means by which the data is managed so that for example, we can further delineate the drivers for what has been categorized as “Other Damage” in the past.

New Program Creation – in the event it is determined that new programs are required to support the Utilities ability to manage risk, these programs will be designed, approved by management, documented and added to the Plan with change manage records documented.

Physical Improvement

System Change – Performance on the results of the analysis of the resultant data from the Programs currently being implemented, the best resolution to the management of specific threats may require system changes. Such changes are currently being evaluated and proposed through the Main and Service Replacement Program. In the event other system changes are required, a change management process will be followed to ensure the implications were considered, the appropriate approvals were granted, that the change was documented and finally, that the Plan was updated accordingly.

One Off Mitigation – in the event the annual analysis of the data provided through the various programs currently being implemented suggests that any area fall outside the norm in terms of risk, the Utilities will address each of these on an as needed basis. This may include mitigation of a specific threat though one time enhancement to the programs that manage this threat and/or its consequences, or it may include taking actions that heretofore have not been part of any program in place. If these one off mitigations are required and they are not part of any existing program, consideration will be made as to whether the creation of a new program is in order.

Regulatory Involvement

Regulatory Involvement – the commitment to be involved in all regulatory events. This includes active participation in industry forums such as SGA, AGA and GPTC. Additionally, all State and/or Federal public forums will be attended. It is the your position that as an LDC with an exemplary safety record, you can set examples for industry and serve a thought leaders in terms of their ability to safely manage their distribution integrity systems.

Reporting

External DOT Annual Revised DOT

Internal Performance Improvement Change Management

Program Descriptions

The Program Performance Risk Management approach includes formalized program descriptions for each of the programs being implemented. These descriptions, at a minimum will include:

Roles & Responsibilities Personnel Qualifications Procedures System Knowledge Support Threat Identification Threat Management Consequence Management Effectiveness Measures


A Distribution Integrity Management SME Approach The Approach is predicated on

Program Performance Risk Management Programs currently being implemented are utilized to demonstrate

compliance

The Approach Includes The Written Plan Your Current Methodology for 49 CFR 192 Compliance Three Distribution Integrity Procedures

1. Program Performance Evaluation

2. Threat Specific Risk Management

3. Results Driven Improvement

Plan Implementation

Program Performance Evaluation Program specific analysis for threat / consequence management Each program is analyzed to determine its effectiveness in managing the various

threats and associated consequences

Prioritized Risk Management Threat specific program management Each threat is analyzed to determine the effectiveness of the various programs

that manage it in some fashion

Results Driven Improvement Program objectives being met Risk being managed

ICAM is a web based application that supports the management, scheduling, tracking, documenting and reporting of your distribution integrity procedures.

ICAM does not deal with numerical data; rather, it captures who, what, when, where and why.

ICAM provides decision based routing, notifications, management visibility and performance measures against program objectives.

From a business perspective ICAM ensures program sustainability, protects against workforce attrition and supports knowledge continuity.

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Questions?

[email protected]

713-520-5050

1 DIMSA A Distribution Integrity Management SME Approach August – 2009.

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