Blue Ocean Planning Final Report March, 2017

Contents Executive Summary Purpose Overview of Approach Conclusions Study Summary Site Visits Observations Location Assessment: Ops Center Location Benchmarking Location Model (Based on Meter Locations) Location Model - Enhanced (Based on Meter & Gas Main Locations) Construction Office Coverage - Initial & Enhanced Review Approved Spoil Yard Sites Strategic Site Assessment Ratings

Executive summary

Purpose of Study Before investments are made in the facilities… Identify whether CPA has the right number of facilities in the right locations to effectively support field operations. Provide some preliminary feedback on the facility size, suitability, and other considerations for subsequent long range facility planning.

Overview of Approach No major changes in operations are anticipated An iterative approach was used to perform this study Locations were benchmarked (travel time to customers vs. other utilities) Initial Location Assessment of overall service area Operations Construction Offices Enhanced Location Assessment of SW PA area The field operations HQ sites were visited Observe the range of conditions Assess “strategic facility ratings” and identify potential opportunities

Conclusions About the right number of Operation Centers & MODS in good locations Two could be eliminated with minimal travel time increase, but feasibility of appropriate facilities in needed locations is questionable. Some facilities need refresh or rebuild. Construction offices are well located for the expected pipe replacement program Replacement work in outlying areas can continue to be managed from local Operations Centers/MODs.

Conclusions Wide variation in facilities between old and new… Condition: some are very tired, with deferred maintenance, Need planned capital renewal Substantial variation in space (GSF/person) at Ops Centers and MODS Overall facility plan needs to address space and condition

Study summary

Observations from Site Visits There is a wide range of size & quality among facilities. Strategic Site Assessments are documented below

Location Benchmarking This study compared travel time from CPA’s existing field HQ locations (to customers) with set of national electric/gas utilities CPA has favorable Travel times by using the MOD approach CPA The report:

Initial Location Assessment An initial location assessment performed (next slide) Various data about the facilities was reviewed: CPA has smaller facilities than most gas companies The report:

Initial Location Assessment - Operations Entire service area evaluated Work forecast based only on meter distribution

Initial Location Assessment - Construction Initial screening based on average Pipe Risk rating

Enhanced Location Criteria Data on location and type of gas mains was used to refine the location analysis Total LF main considered for maintenance (along with meter density) Total LF non-plastic main considered for risk and replacement work

Enhanced Location Assessment Focus on Southwest PA portion of service area East and far north are geographic “islands” and site visits did not identify much opportunity Further evaluate potential opportunities from initial assessment Enhanced work forecast was based on mix of: 1/3 meters 1/3 main 1/3 weighted pipe risk

Enhanced Location Assessment – Construction Offices “Optimum” locations are slightly different than current Net travel difference not significant enough to relocate Continue managing rural project work from operating sites

Enhanced Location Assessment - Operations Two sites could be eliminated with little travel time impact (if facilities can accommodate) No other opportunities of value

Enhanced Location Assessment - Operations “Optimum” locations are slightly different than current Alpine Point "should" be consolidated into Horning Road in Bethel Park area – not believed to be physically or financially feasible. Net travel value not significant enough to relocate other sites

Spoil Operations Also Need a Plan There are several areas where spoils yard or contracted spoil management will be needed to avoid long drives.

Spoil Management Where a “permitted” spoil yard is not available, consider contracting the spoil management

Strategic Site Assessment Ratings & Recommended Action Plan Sites were visually assessed for: Location – general location; includes a if confirmed by location model Design Suitability – layout supports effective operations Condition Rating – physical condition of building and site Utilization – how well used is the facility OpEX Rating – relative cost of facility operation Observed Risk – noted if any observed A recommended action is identified for each facility Potential projects to be evaluated identified in appendix

Strategic Site Assessment Ratings Continued…

Strategic Site Assessment Ratings

Next Steps for CPA Develop Space Planning Templates Identify where further assessments are warranted Condition Perform feasibility studies of identified consolidation opportunities and relocate/rebuild options: Identify available real estate, Perform fit test, Assess financial feasibility Develop Investment Plan by Site Capital (Improvements & Renewal) O&M budget

Appendix

Horning Road Good location Leased Tired Too small RECOMMEND: Develop a larger facility Relocate some field crews from Alpine Point

Washington Good location Owned/leased Worn out RECOMMEND: Tear down & rebuild or find new suitable site nearby

Neville Island Good location Leased Not enough site area to park trucks; not fenced Needs major refresh RECOMMEND: Find new suitable site nearby

New Bethlehem/Emlenton Major rebuild/refresh both or consolidate Owned RECOMMEND: Upgrade both or find new suitable site near the center

Uniontown Good location Leased Poor layout Planning for additional staff Needs major refresh RECOMMEND: Find new suitable site nearby (or evaluate office renovation in combination with Charleroi)