2013 AGA Best Practices Conference Key Performance Indicators within Gas Operations Jennifer Walker Southern California Gas Company and San Diego Gas & Electric January 17, 2013 © 2013 San Diego Gas and Electric and Southern California Gas Company. All copyright and trademark rights reserved.

Agenda Overview of SoCalGas and SDG&E operations Our vision of KPIs Traditional use KPIs Current KPI management practices Transitioning to new electronic data collection systems KPIs in the future 2013 AGA Best Practices Conference January 17, 2013 Slide 2

About SoCalGas and SDG&E Provides natural gas distribution service to San Diego County 845,000 natural gas meters 3.5 million consumers 4,100 square miles 2 counties 18 incorporated cities 25 communities 4,900 employees SoCalGas* Largest natural gas distribution company in the nation 5.8 million natural gas meters 20.9 million consumers 20,000 square miles 12 counties 232 incorporated cities More than 500 communities 7,200 employees *Data is Approximate 2013 AGA Best Practices Conference January 17, 2013 Slide 3

Our Service Territory (SoCalGas & SDG&E) We serve nearly all Central and Southern California 2013 AGA Best Practices Conference January 17, 2013 Slide 4

Gas Distribution System Approximately 112,800 miles of distribution mains and services Distribution pipeline by material: Plastic (Polyethylene): 62,000 miles (55%) Steel: 50,800 miles (45%) Gas Transmission System Approximately 4,000 miles of pipeline 2013 AGA Best Practices Conference January 17, 2013 Slide 5

Underground Gas Storage Four Storage Locations (all SoCalGas) Aliso Canyon Honor Rancho La Goleta Playa Del Rey 2013 AGA Best Practices Conference January 17, 2013 Slide 6

Basic KPI Concept Data Driven Development Analysis Metrics/ Reporting What is the new action? How can you influence metric? Favorable or unfavorable? What happened? Analysis Data Driven Development Metrics/ Reporting 2013 AGA Best Practices Conference January 17, 2013 Slide 7

Rationale for our KPIs Different KPIs are reported at different levels Departmental Objectives Divisional Objectives Strategic Objectives Rationale for our KPIs Different KPIs are reported at different levels KPIs must be actionable KPIs must be relevant to the level of the organization 2013 AGA Best Practices Conference January 17, 2013 Slide 8

KPI Displays Ensure measurability Ensure relevancy Ensure accuracy Dashboards KPIs Metrics Data Ensure measurability Ensure relevancy Ensure accuracy Scorecards and Dashboards Show graphically – depict trends View KPIs in single location – balanced picture Focus on the most valuable KPIs to tailor efforts 2013 AGA Best Practices Conference January 17, 2013 Slide 9

How KPIs are Determined First, identify the goal Then, select/define the KPI(s): Allow for a thorough discussion among stakeholders Explore relevancy and consistency Ensure they are specific, actionable and movable Strive, when possible, to develop KPIs through a collaborative and iterative process Who sets our KPIs? Some are set at the top Some set at the bottom Some are set by the Commission/external Set true KPIs that will show the performance of the organization. 2013 AGA Best Practices Conference January 17, 2013 Slide 10

How KPIs are Tracked/Reported Timing Internal reports – monthly with some weekly Commission and PHMSA stats – annual report Commission data reports – quarterly Who gathers and organizes the data? Staff groups Local departments Most is automated and some requires manual intervention Who monitors KPIs? All levels of organization – supervisors to senior management When KPIs discussed? Monthly staff meetings Identify reasons for when significantly over or under targets Keep KPIs upfront and visible in the organization 2013AGA Best Practices Conference January 17, 2013 Slide 11

How we use KPIs Validate that safety is a top priority Support rate cases Monitor performance of initiatives, projects, programs Manage operation efficiency Justify budgets Predict issues in the future by observing trends. 2013 AGA Best Practices Conference January 17, 2013 Slide 12

SoCalGas/SDG&E KPI Audiences The Corporate Card – Highest level report  The Utility Executive Card – Reports key performance metrics to utility executives – more detailed level  The Distribution and Customer Service Operating Report – Reports information to regional management – system level.  2013 AGA Best Practices Conference January 17, 2013 Slide 13

Traditional KPIs Safety: injuries, lost-time incidents, motor vehicle incident statistics, etc. Customer Service Field: # orders worked, PMCs worked, incomplete order %, cost per customer, cost per order, average emergency response time, etc. Distribution: Locate and Mark cost per ticket, leak survey cost per foot, pending leak counts, new business costs and replacement costs, etc. 2013 AGA Best Practices Conference January 17, 2013 Slide 14

World is Changing KPI focus today is to develop KPIs that show: Pipeline integrity/safety System reliability Service level responsiveness System compliance Notable points to keep in mind: The public is watching and demanding more information Safety can always be improved New regulations coming at State and Federal Level 2013 AGA Best Practices Conference January 17, 2013 Slide 15

SoCalGas and SDG&E’s Commitment to KPIs Safety performance will be monitored and evaluated regularly in accordance with state and federal regulations. Additional performance metrics will be developed and evaluated, as appropriate, to foster a culture of continuous safety improvement. These performance metrics will be reviewed and communicated in accordance with the schedules identified in the specific policy, program, plan or other document incorporated as part of our Safety Plans. 2013 AGA Best Practices Conference January 17, 2013 Slide 16

Pipeline Safety Metrics New regulations are expected to include a formal goal and commitment to move to a more data-driven safety program. The CA Commission directs CA gas pipeline operators to: Validate assessments using TIMP program numbers Measure performance, monitor results, and evaluate effectiveness of all integrity management programs Consider the results of the performance monitoring in threat and risk evaluations Report, on an annual basis, the number of leaks and excavation damages to PHMSA and the state pipeline safety authority Document employee safety communications 2013 AGA Best Practices Conference January 17, 2013 Slide 17

Transitioning To New Electronic Pipeline Data Collection Systems We recently introduced new enterprise resource planning (ERP) systems to capture distribution data electronically As this transition occurs: Validate data Train employees Enhance processes/systems Consider: Data quality Data sources Use of data for trending KPI Analytic Applications Data Warehouse/Marts ERP Legacy Systems 2013 AGA Best Practices Conference January 17, 2013 Slide 18

Summary Considerations for KPIs Consider the purpose and the audience    Don’t focus on a single number Consider the timing for pulling data Assess underlying data – Homogenous Sufficient sample size Consistent data collection Account for data collection costs Exercise caution when using new KPI data Do not compete on safety 2013 AGA Best Practices Conference January 17, 2013 Slide 19

Future for KPIs Post- San Bruno World More data to collect Tighter definition of terms – industry standardization Move from paper to electronic data entry More advanced IT systems needed (data accessibility and validation) Integrated software essential (GIS – Maintenance) Need staff focused on data analytics Monitor compliance, integrity, response and reliability 2013 AGA Best Practices Conference January 17, 2013 Slide 20

Summary Provided an overview of how SoCalGas and SDG&E view KPIs Listed some concerns and areas of focus in KPI development Provided thoughts about current and future KPI trends 2013 AGA Best Practices Conference January 17, 2013 Slide 21