DUKE ENERGY OH & KY – AT A GLANCE Duke Energy Ohio, Duke Energy Kentucky, and its predecessor companies have been providing natural gas for more than 177 years 400,000 natural gas customers in southwest Ohio 100,000 natural gas customers in northern Kentucky 7,310 miles of pipeline 7,143 Distribution 168 Transmission 8 Miles Hazardous Liquid (Propane) 6,138 miles of service lines

DUKE ENERGY FRANCHISED GAS SERVICE TERRITORY

OHIO REVISED CODE – GAS LEAKS Ohio - Grade 1 Leak Take immediate and continuous action on leaks classified as grade one to protect life and property until the condition is no longer hazardous. Continuous action is defined as having personnel at the scene of the leak with leak detection equipment attempting to locate the source of the leak and taking action to prevent migration into structures, sewers, etc. If the hazardous condition associated with the leaks classified as grade one is eliminated, such as by venting, temporary repair, etc., but the possibility of the hazardous condition returning exists, the condition must be monitored as frequently as necessary, but at least once every eight hours, to protect life and property until the possibility of the hazardous condition returning no longer exists. Leaks classified as grade one may be reclassified by performing a physical action to the pipeline (clamp, replacement, tape wrap, etc.) or pipeline facility. Reclassification must be in accordance with the criteria in paragraph (H) of this rule and by an individual who is qualified to classify leaks under the company's operator qualification plan. Venting, holes, aerators, or soil purging of a leak are not considered physical actions to the pipeline. If a leak is reclassified after performing a physical action, the time frame for any required repair(s) and/or reevaluation(s) at the resulting classification will be calculated from the date the leak was reclassified.

OHIO REVISED CODE – GAS LEAKS Ohio - Grade 2 Leak Repair or clear leaks classified as grade two no later than fifteen months from the date the leak is discovered, unless the pipeline containing the leak is replaced within twenty-four months from the date the leak is discovered. If a replacement project that will clear a leak classified as grade two is cancelled after the fifteenth month after classification of the leak(s), the associated leak(s) must be cleared within forty-five days of the cancellation of the project, not to exceed twenty-four months from the date of the leak classification. Leaks classified as grade two shall be reevaluated at least once every six months until cleared.

KENTUCKY – GAS LEAKS 807 KAR Chapter 5 At intervals not to exceed three (3) years, gas meters shall be manually inspected and visually examined for proper working condition.

Leak Management consist of the following elements: Initiation of a Leak Leak Repairs Quality Control Prevention

Leaks are primarily generated from three (3) sources: LEAK INITIATION Leaks are primarily generated from three (3) sources: Odor calls Leak survey 3rd party damages

ODOR CALLS & DATA COLLECTION All odor calls are dispatched through a mobile Work Management System Approximately 27,000 odor calls were dispatched in 2013 All leaks are reported via mobile data terminals at time of discovery and interface to Work Management System allowing better documentation of leak information All completed leaks are recorded in the Work Management System Leaks are scheduled for repair by compliance dates and customer concerns

ODOR CALLS & DATA COLLECTION Quality Control Point All leaks are exported from the mobile Work Management System to the Work Management System and assigned to a district Scheduling Specialist assigned to each district Approve all leaks assigned to their district Review data for accuracy Scheduling Specialist participates in the State Commission audits for leaks Predefined reports from the Work Management System for active leaks are reviewed weekly for accuracy and compliance dates Weekly reports are generated and emailed to Scheduling Specialist with any active leaks with a compliance date the following week

Interior Leak Surveys (3 Year) – performed by Contractor personnel Exterior Leak Surveys (Quarterly/Semiannual/Annual/3-Year) – performed by Company personnel Leak survey mains and services Visual inspection for atmospheric corrosion Manual inspection and visual examination of meter Interior Leak Surveys (3 Year) – performed by Contractor personnel Leak survey inside jurisdictional service piping Business District and High Occupancy/Designated Building Leak Surveys (Annual) – performed by Company personnel Buildings with or without gas service Inside and outside survey of service piping

Supervisor and crews meet to discuss next years requirements EXTERIOR LEAK SURVEY Leak Survey personnel consist of 1 supervisor and 10 company field employees Each crew consists of 1 person Typically most senior personal in the Construction Department perform leak survey The leak survey requirements for the following year are prepared for Field Operations in December Paper maps are created from a custom program Investigating automated systems to produce digital maps for planning and tracking Supervisor of Leak Survey determines the number of employees required to complete the survey for the next calendar year 2014 required 3000 miles of survey 3-year Distribution, Business District, Transmission Supervisor and crews meet to discuss next years requirements Leak survey routes are assigned and scheduled with input from the crews Crews schedule routes to meet the calendar deadline

EXTERIOR LEAK SURVEY All leaks are reported via mobile data terminals at time of discovery and interface to Work Management System allowing better documentation of leak information All completed leaks are recorded in the Work Management System All open leaks are reviewed and accepted by the district Scheduling Specialist in the Work Management System Leaks are scheduled for repair by compliance dates/customer concerns

EXTERIOR LEAK SURVEY - DUTIES Leak Survey personal performs 3 separate surveys on their routes Leak Survey Atmospheric Corrosion Survey Manual inspection and visual examination of the gas meter Leak Detected All leaks are pinpointed An indication of a gas leak will be confirmed with a combustible gas indicator (CGI) The leak will be classified/graded The surveyor will repair the leak if possible

EXTERIOR LEAK SURVEY Quality Control Point All leaks are exported from the mobile Work Management System to the Work Management System and assigned to a district Scheduling Specialist assigned to each district Approve all leaks assigned to their district Review data for accuracy Predefined reports from the Work Management System for active leaks are reviewed weekly for accuracy and compliance dates Weekly reports are generated and emailed to Scheduling Specialist with any active leaks with a compliance date the following week

EXTERIOR LEAK SURVEY - EQUIPMENT Each crew performing leak survey reports from their home in a company truck The crew is required to be in their survey area at the start of their shift The leak surveys are performed with a Remote Methane Leak Detector Remote Methane Leak Detector has several advantages Each crew is also equipped with a flame ionization detector Combustible Gas Indicators Various tools to pinpoint and classify leaks and perform minor repairs Vehicles are equipped with Mobile Data Terminals to document the leak information

EXTERIOR LEAK SURVEY - DOCUMENTATION Walk sheets to specify what area was surveyed and footage completed are manually recorded each day RMLD and Flame Ionization units are calibrated daily and manually recorded on the daily walk sheet Combustible Gas Indicators are calibrated weekly and manually recorded on the daily walk sheet Survey maps are manually highlighted daily to record progress and all leaks are plotted All paper work is turned in each week The above information indicates Which mains and services have been surveyed each day Which instrument was utilized and the calibration information for the instrument Which CGI was utilized and the calibration information for the instrument All leaks found during the survey

EXTERIOR LEAK SURVEY - DOCUMENTATION Each truck is equipped with a mobile data terminal to enter the leak data into the mobile Work Management System

EXTERIOR LEAK SURVEY - METRICS Metrics Measured: Number of leaks detected by leak survey Average miles of main surveyed per 8-hour day for each person Weekly footage completed on each map Data is utilized to determine amount of main footage required and to be completed each month by: District Transmission Line Distribution Map Crew

EXTERIOR LEAK SURVEY – QUALITY CONTROL Active leaks in the Work Management System are spot-checked against the completed leak survey The supervisor will investigate an active leak that was not detected by leak survey Instrument utilized Calibration data Weather conditions at the time of the survey Daily mileage is monitored for productivity and quality of survey

INTERIOR LEAK SURVEY Inside Pipe Survey 3 year distribution and Business District Inside Pipe Survey is completed by Contractors Telephone Call Cold call with door hanger if unsuccessful Letter Final cold call with door hanger Gas service is terminated if no response Work Performed Leak Survey Atmospheric Corrosion Manual inspection and visual examination of the gas meter

INTERIOR LEAK SURVEY All gas leaks and any safety concerns detected by the Contractor with a gas facility is immediately reported and the Contractor will stand by until a Company responder arrives Atmospheric corrosion is accessed to determine what action is taken Leaks are repaired immediately Leaks detected on non-jurisdictional pipe Gas service is turned off for repair by home owner Statistics 40% of cold calls are successful Gas service is turned off to 14% of the customers Leaks are detected on 4% of the inspections

INTERIOR LEAK SURVEY – QUALITY CONTROL Contractors are audited daily by the Contractor Inspection Department Inspecting Mechanic will spot check work performed by contractor Inspecting Mechanic will perform leak survey, atmospheric corrosion survey, visual inspection and manual examination on facilities previously inspected by contractor Discrepancies are identified and reported to the Supervisor in the Contractor Inspection Department

DESIGNATED BUILDING LEAK SURVEY Service Mechanics Perform the Designated Building Leak Survey High Occupancy buildings with or without a gas meter Work Performed Leak Survey Atmospheric Corrosion Manual inspection and visual examination of the gas meter Relief valve inspection Etc.

LEAK SURVEY - UPDATES Business Districts are updated each year from information provided by the Surveyors Designated Buildings are also updated from information provided by the surveyor and billing

THIRD-PARTY DAMAGES Service Mechanic and Construction crew dispatched simultaneously Service Mechanic will enter data in mobile data terminal Leak is exported to the Work Management System Construction crew will complete the repair and capture all data on paper Paper and electronic work order matched up to complete the leak. Information on the form is placed in the Work Management System Paper records are scanned and stored for future reference

LEAK CLASSIFICATION Leak Classification All leaks are classified as a Grade 1 or Grade 2 Grade 3 is not utilized for leak classification Leaks are classified by company personnel only Leak Surveyors Construction Crews Service Mechanics

Active leaks are kept within the Work Management System LEAK REPAIRS Active leaks are kept within the Work Management System A Scheduling Specialist position was created in 2008 to provide scheduling and prioritizing of leak repairs Administration of work in Work Management System  Leaks are scheduled for repair by compliance dates and customer concerns Company goal is to have 90% of all active leaks with an origination date less than 6 months Increase safety for the customer and system integrity Reduction of cost by eliminating the evaluation of leaks every 6 months

LEAK REPAIRS Leak repairs are completed by a combination of Company and Contractor personnel Gas Main Repairs Main repairs are completed by Company crews Gas Service Repairs Gas services renewed main to meter rather than repaired Completed by either Contractor or Company crews Trenchless technology utilized when possible

LEAK REPAIRS Documentation Company and Contractors document repairs on paper Information on the forms is placed into the Work Management System Paper records scanned and stored for future reference

PREVENTION - THIRD PARTY DAMAGES Statistics 2010 6.18 damages per 1000 locate requests 2011 9.38 damages per 1000 locate requests 2013 5.15 damages per 1000 locate requests 2014 3.10 YTD damages per 1000 locate requests

PREVENTION – THIRD-PARTY DAMAGES Dedicated damage investigators respond to the scene and investigate all third-party damages These individuals respond to third-party damages Determines fault at the scene Third-Party Locate Contractor Company Participate in the multiple venues: Contractor safety meetings Public awareness conferences Fire Chief meetings Know the equipment operators Operators will personally contact for issues

PREVENTION – ACCELERATED MAIN REPLACEMENT PROGRAM Accelerated Main Replacement Program (AMRP) All cast iron and bare steel gas mains and associated services have been replaced in Kentucky All cast iron and bare steel gas mains and associated services will be replaced in Ohio by the end of 2015 Main Replacement Program has Significantly Reduced the Number of Active Leaks Replacement Program was prioritized by risk Date of installation Size of main Operating pressure Class locations AMRP allows for the “carry over” of a scheduled leak repair an additional 9 months when the leak is associated with an active replacement project AMRP has mitigated the risk of a leak occuring

PREVENTION – ACCELERATED SERVICE REPLACEMENT PROGRAM Proposed Accelerated Service Replacement Program (ASRP) Replacement of all bare steel, copper and cast iron services

PREVENTION - MATERIALS Material Committee Materials Committee investigates failures Determine if material or operator issue If the failure is material related Provide alternatives If the failure is operator related Develop communication to review with employees Develop recommendations for training Example of findings from Material Committee Stab fittings discontinued on plastic piping Electro fusion or butt fusion are the only methods for joining pipe Stabs utilized during inclement weather and removed at a later date

PREVENTION – CROSS BORES High Risk Leak Trenchless technology requires all sewers and storm drains located prior to installation All sewers and storm drains are inspected with a camera and video recorded before gas is placed on the service

PREVENTION - TRAINING Company employees and contractors are instructed and OQ by company trainer Consistency Employees must have desire to want to perform each task as it was presented and taught by everyone involved A strong core belief to follow policies & procedures, understand one’s job and the expectations that follow   All involved with the process are flexible and have the ability to change direction when needed