QUALITY MANAGEMENTAGA – BEST PRACTICE ROUNDTABLE

Sara Peralta, Director – Quality & Improvement

Philadelphia February,

2013

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PRESENTATION AGENDA

Pacific Gas & Electric (PG&E)• System Overview• Quality Movement• PG&E’s Vision & Top 10 Priorities

Organizational/Business Structure• Organizational Overview• Key Processes & Asset Families• Gas Safety Excellence (PAS 55)

Quality Program Deep Dive• Corrective Action Program• Procedures• Quality Control

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SYSTEM OVERVIEW

PG&E’s system is comprised of:

● ~ 42,000 miles of natural gas distribution pipelines

● ~ 5,700 miles of gas transmission pipelines ( w/~ 1000 miles of High Consequence Areas)

● ~ 42 miles of gas gathering pipelines

The entire transmission, distribution and gathering network serves ~ 4.4 million gas customers

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SAFETY QUALITY

The National Transportation Safety Board determines that one ofthe probable causes of the accident was the Pacific Gas and Electric

Company's (PG&E) (1) inadequate quality assurance and quality control

in 1956 during its Line 132 relocation project…

It’s all about Safety. Out of tragedy should come change …

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QUALITY MOVEMENT

192.605 (b)(8) Each operator shall prepare a manual of written procedures for conducting operations and maintenance which must include procedures for periodically reviewing the work done by operator personnel to determine the effectiveness and adequacy of the procedures and modifying the procedures when deficiencies are found.

• 2011 Gas Transmission ANPRM

• NTSB’s 2011 “Most Wanted List” – Safety Management Systems

• 192.305 – Independent inspections for transmission construction

• CPUC 2012 Gas Safety Plan

o Perform targeted and random field checks of facilities

o Promote continuous improvement in work quality

o Will develop/utilize risk-based safety programs

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TOP 10 GAS OPERATION PRIORITIES

1. Build a culture that puts public and personal safety first

2. Establish a clear organizational structure

3. Engage workforce and recruit talent

4. Rebuild integrity management process

5. Develop accurate asset knowledge

6. Achieve full regulatory compliance (rebuild trust)

7. Create and implement consistent standards, work methods and procedures

8. Establish an investment planning function

9. Improve gas transmission system control and build distribution control system

10. Revamp Quality Assurance/Quality Control capability

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ORGANIZATIONAL/BUSINESS STRUCTURE

Gas Operations Org Structure

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Q&I PROGRAM ELEMENTS & FOCUS AREAS

Quality & Improvement Sara Peralta

AdvisoryCorrective Action Program

Quality Control Manager

QC Focus Areas:ConstructionDamage PreventionLeak RepairLeak Survey

Quality Control Manager

QC Focus Areas:Corrosion ControlField ServicesMeteringRegulation MaintValve Maint

Quality Engineering & Improvement

Manager

AssessmentEmployee Feedback

InvestigationsLessons Learned

Observations

Quality Systems

Manager

Information SystemsMetrics & Reporting

ProceduresQuality Records Mgmt

Quality Training

AuditSupervisor

Auditing

(23) (13)(16)

(5)

(6)

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Backbone Transmission

Regulator Station

Upstream Fire Valve

Downstream Fire Valve

Emergency Zone Valve

Distribution Feeder Main≥20% SMYS

Distrib

utio

n M

ain

Tee

Excess Flow Valve

CurbValve

Service

RiserM

Residential or Commercial Customer

NOT DRAWN TO SCALE

Regulator

C

Compressor Station

Storage

Transmission Pipe

Distribution ServicesMeasurement & Control

Distribution Mains

Not included in gas asset system

M

Meter

Gathering Lines

Cathodic Protection

Station Protection

M

Meter

Interconnecting Pipeline

Interconnect

M

Turbine & Ultrasonic Metered Customers

S

Odorizer

Separator

Distribution Feeder Main<20% SMYS

Local Transmission

Meter

Master Meter

Regulator

CNG/LNG

CNG/LNG

Compression & Processing

- - - - - - - - - - - - - 8 Gas Asset Families - - - - - - - - - - - - -

Customer Connected Equipment

GC

US

T

HPR

~

~~

Storage Reservoirs

WellWell

ProcessingS C

PG&E’s GAS ASSET FAMILIES

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KEY GAS PROCESSES

Process Process Owner Process Champion

1 Damage Prevention John Higgins Roland Trevino

2 Corrective Action Program Sara Peralta Jane Yura

3a Leak Management (Survey) Steve Redding Kevin Knapp

3b Leak Management (Repair) Jodie Kubota Kevin Knapp

4a Emergency Response (IR) Rod Williams Kevin Knapp

4b Emergency Response (Make Safe) Rich Yamaguchi Kevin Knapp

5 Class Location / HCA Determination Joe Medina Sumeet Singh

6 Instrumentation & Regulation Ross Leverett Kevin Knapp

7 Corrosion Bennie Barnes Roland Trevino

8 As-Built Robert Henley Sumeet Singh

9 Welding Pierre Bigras Kirk Johnson

10 Non-Destructive Examination Peter Kenny Kirk Johnson

11 Right Of Way Management / Patrols Mike Falk Kirk Johnson

12 Materials Management Michael Ritter Sumeet Singh

13 Construct Distribution Facilities Jon Little (interim) Kevin Knapp

14 Work Requested Others / Public Works Coordination Jeff Gravelle Jesus Soto

15 New Business Sini Jacob Mel Christopher

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GAS SAFETY EXCELLENCE VISION

PG&E’s goal is to become the safest gas utility in the nation:

Nurture a safety-first culture

Understand and know our assets and their condition

Continuously assess, re-assess risks, and adjust our risk management

plans

Design safety into our process and asset management systems

Safely operate our system and respond appropriately to emergencies

Embed continuous improvement in all that we do

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PAS 55: QUALITY in ASSET MANAGEMENT

• PAS 55 was developed in 2004 as the first publicly available specification for optimized management of physical assets.

• There has been broad adoption in utilities, transport, mining, process and manufacturing industries worldwide.

• The International Standards Organization (ISO) has now accepted PAS 55 as the basis for development of the new ISO 55000 series of international standards.

CORRECTIVE ACTION PROGRAM & PROCEDURES

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CORRECTIVE ACTION PROGRAM (CAP)

• CAP is a program that: • Captures incidents (events that have already happened) and potential

incidents (events that haven’t happened but are identified as a risk);

• Analyzes incidents & potential risks;

• Recommends corrective actions to address issue and prevent future recurrence;

• Recommends preventive actions to prevent occurrence in first place; and • Continuously assesses effectiveness; monitors trends; and communicates

results.

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CAP in GAS OPERATIONS

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2

Advisory Recommendations

Employee Feedback

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Observation Results

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Lessons Learned

CAP:• Issues into CAP system• Assign risk-based significance level• Perform causal evaluation (root cause

analysis, etc..)• Identify corrective/preventive actions• Track actions to completion• Monitor, trend, assess effectiveness

Quality Control Issues

Improvements

Assessment Results

Incident Investigations

• Reduced Risk• Increased Safety• Improved

Compliance

AuditFindings

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PROCEDURES

A major areas of anticipated improvement through CAP is in the area of improvements to PG&E’s guidance documents (policies, standards, procedures)

External factors: Updated technology / tools Regulatory changes CAP improvements

StandardsPrioritization

Doc Development

Implementation PlanningImplementation

Sustainability

QUALITY CONTROL

19

QUALITY CONTROL (QC)

GENERAL QC PROGRAM FRAMEWORK

• Define regulations, policies, standards, work procedures governing

the work

• Develop a risk-based scorecard

• Identify the population of completed work

• Perform real time or after-the-fact field assessments on a random

sampling basis

• Communicate findings

• Adjust the sampling based on findings

• Develop local or system corrective actions for any findings as

appropriate

QC PROGRAM STATUS DESCRIPTION

Field Services Operational since the 1990’s

Performs in field quality control reviews of Gas Service Rep completed tags including customer appliance inspections and leak investigations

Leak Survey Operational since 2009

Measures the quality of leak survey maintenance process including whether any Grade 1’s were missed

Leak Repair Operational since 2009 Evaluates completed leak repairs for the presence of gas 90 days post-repair

Locate & Mark (L&M)

Operational since 2011 Validates and scores completed L&M tags including “No Conflict” tags

Transmission Construction

Actively under development

Will focus primarily on measuring the quality of transmission construction work performed by PG&E employees and contractors as the work is being

performedDistribution Construction (Re-Dig)

Actively under development

Will focus primarily on short cycle distribution installation and leak repair work performed by PG&E employees and contractors after the work has been

completed

Pipeline Patrol Actively under development

Will perform quality control field inspections behind patrol activities including corrective action documentation, follow-up , and completion

Metering Actively under development Pilot planned for 2nd quarter. System-wide rollout by end of 2013.

Corrosion Control Future Development starting in 2013.

Regulation Maintenance Future Development starting in 2013.

Valve Maintenance Future Development starting in 2013.

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QC RESULTS - 2012

QC Program Assessments Completed

YTD Results(pass rate) Comments

Locate & Mark 451 77% • System wide pass rate was <40% a year ago

Leak Survey 208 70%

• Started measuring end-to-end process in July (52% pass rate)

• Previously only measuring performance on missed Grade 1 leaks (3 so far this year)

• QC process updated to include zero’d out leaks

Leak Repair 871 97%

A-forms 382 90% • Started 2012 with 81% pass rate, last two month2 have achieved 100%

Field Services 581 98%

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QC RESULTS & TRENDS

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12Aug-12

Sep-12

90%

92%

94%

96%

98%

100%

Leak Repair QC – % Assessments Passed

Repaired Leak Evals Monthly Trend Line

Month

Pa

ss

Ra

te

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12Aug-12

Sep-12

40%

50%

60%

70%

80%

90%

100%

A-Form Reviews

A-Form Review Results Trend Line

Month

Pa

ss

Ra

te

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QC RESULTS & TRENDS CONT..

Sep-11Oct-11

Nov-11Dec-11

Jan-12Feb-12

Mar-12Apr-12

May-12Jun-12

Jul-12Aug-12

Sep-12

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

% Assessments Passed Trendline Pass/Fail Line

Locate & Mark QC - % Assessments Passed

Jun-12 Jul-12 Aug-12 Sep-1230%

50%

70%

90%

Leak Survey Next Day Assessments% Assessments Passed

Pass/Fail Line

Leak Survey Next Day Assessments Monthly

Month

Pa

ss

Ra

te

What you observe, focus on, emphasize, etc.. will improve. If you want to improve it, measure it.

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DISTRIBUTION CONSTRUCTION (Re-Dig)

PROGRAM GOAL: • To implement a QC Re-Dig program that is statistically valid with a primary focus on

gas distribution short cycle new installation and repair work performed by PG&E employees and contractors.

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RE-DIG SCORECARD LIST

• Pre Job Package quality

• Backfill material/Compaction

• Placement of sleeves, casing bushings, and overall “as left” condition

• Quality of Wrap installation

• Weld appearance

• Stab depths

• Locating wire continuity

• Proper material including EFV's installation/repair method used

• Accuracy of Measurements to property lines/building/landmarks

• As Built drawings/information for fittings, offsets and material types

• Completed Job package quality

• Job close out and documentation

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RE-DIG PILOT RESULTS

• 52 Re-Digs performed

• Overall pass rate was 48%

• Top Findings: • Documentation Issues• Process Adherence

• Handling of pre-1972 wrap• Equipment Calibration

• Workmanship• Locating wire issues• Primer not used when necessary• Fittings not properly installed

• Pilot surfaced several areas of procedural conflict/confusion targeted for resolution

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PG&E’s BELIEF

“.. Quality management includes the activities and processes that an organization uses to achieve quality. These include formulating policy, setting objectives, planning, quality control, quality assurance, performance monitoring, and quality improvement.

Achieving quality is critical to gas transmission pipeline design, construction, and operations. PHMSA recognizes that pipeline operators strive to achieve quality, but our experience has shown varying degrees of success in accomplishing this objective among pipeline operators.

PHMSA believes that an ordered and structured approach to quality management can help pipeline operators achieve a more consistent state of quality and thus improve pipeline safety. PHMSA is considering whether and how to impose requirements related to QMS…”1

1 Department of Transportation, Pipeline and Hazardous Materials Safety Administration, 49 CFR Part 192, [Docket No. PHMSA-2011-0023] RIN 2137-AE72, Pipeline Safety: Safety of Gas Transmission Pipelines

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THANK YOU!!

sara.peralta@pge.com