1. Introduction 2016 Transmission & Distribution Benchmarking
Community Insights Conference
Introduction
August 22-25, 2016
Park City, UT

2. Agenda for the Introductory Discussion
Introductions
Purpose of the Meeting
Schedule for the Week
Who’s in the Community
Expectations for the Week

3. Purpose of the Meeting
The primary purpose of the meeting is to discuss the findings from this year’s benchmarking study, including the core subjects and the discussion topic
Highlight performance trends
Identify emerging practices
Share practices with peer companies
A secondary purpose is to begin preparations for next steps
On-site presentations for leaders
Uses of the results at home
Topics of interest for next year
Growing the community in 2017

4. Agenda

5. 2016 Benchmarking Community
Arizona Public Service
Austin Energy
B.C. Hydro
CenterPoint Energy
CPS Energy
East KY Power Coop
Exelon
BGE
PECO
ComEd
PEPCO
Atlantic City Electric
Delmarva Power
FirstEnergy
Ohio Edison
The Illuminating Company
Toledo Edison
Met-Ed
Penelec
Penn Power
West Penn Power
Jersey Central Power & Light
Potomac Edison
Monongahela Power
Hydro-Québec
Kansas City Power & Light
Oncor
Pepco Holdings (PHI)
PSE&G
PSEG Long Island
Southern California Edison
Tucson Electric Power
UES Electric
Westar Energy
Transmission-Only Participants
Teco Energy
Southern Company
Alabama Power
Georgia Power
Gulf Power
Tennessee Valley Authority

6. Expectations for the Week

7. What to Expect this Week
For the core areas of the study, we will present results, and engage some discussion within the group, with a focus on covering a few areas:
Results and trends in performance
Best long-term practices, and what is emerging
How various processes flow through the different functional organizations
How benchmarking can help in improvement efforts
Discussion Topic
Transmission Reliability Metrics and Scorecards

8. A Process Model for Managing the T&D Business
We’ll present much of the information in the context of the process model shown below, with a number of the major process blocks broken into “modules” for analysis and discussion.
Indicates separate D, S, T components
Add New
Customers
Respond to Emergencies
Expand System
Operate System
Sustain System
Project/Portfolio Management
Develop and Approve Asset Plans
Develop System Strategy

9. What You Should Do this Week
Ask questions
Share your ideas
Meet the representatives from the other companies
Ask other companies how they use the results
Ask other companies about the on-site presentations and how they’re set up and used. Consider what themes would you like covered at your on-site.
Think about particular areas of focus that apply to your company, how information can be shared, how your teams can benefit from these results

10. Available Outputs and Uses
Questionnaire Results
Statistical report
Charts, graphs, tables
All sections, plus a “profiles” section
Performance Profiles
Specific to each member company
Trend charts
Insights Conference Presentations
Summaries of each major section
Discussion Topic Results
Webinar Recordings
Click to listen
PowerPoint Summary Files
Insights Conference Presentation
Summary of Findings
On-Site Presentations
Tailored to your request
Covering both questionnaire and discussion topic results
Can be presentation or discussion
Latest version of the report will come out after the meeting. We have received a few data updates, so will be providing an updated statistical report later.

11. Attendee List Company Name Email Austin Energy Mora Asadi
CenterPoint Energy
Martin Ramirez
CPS Energy
Larrissa Benavides
Exelon - BGE
Jeannine Beran
Exelon - ComEd
Garfield Mullings
Exelon – PECO
Vince Guinan
Exelon – Pepco Holdings
Belinda Reid
Exelon
Sharon Lownes
KCP&L
Jill Normile
Oncor
Eileen Brannon
Jesse Medlock
Gloria Salazar
PSE&G
Dean Fazio
PSEG Long Island
Sunita Kumar
SCE
Stephanie Pane
Randy Smith
Westar
Jim Gurney

12. Distribution Statistics and Financials
2016 Transmission & Distribution Benchmarking
Community Insights Conference
Distribution Statistics and Financials
August 22-25, 2016
Park City, UT

13. Insights Overview - Distribution
Demographics
Distributed Generation is having a significant impact in a few jurisdictions, creating cost and operational challenges
Different service territory circumstances and very different choices in terms of how much of the system to place underground have left companies with different outcomes in terms of costs and reliability.
At a time of much discussion of system automation, most companies have a high % of remotely operated switches at substation breakers, while relatively have remote operated switches outside the stations.
Costs
Distribution O&M spending decreased significantly for the 2nd year in a row, bringing the spending levels back to 2010 levels.
Distribution Capital spending has been increasing steadily over the past 4 years. The increase is driven by replacement capital spending more than new business, which continues to be slow.

14. Profiles & Trends

15. Demographics - % Underground Distribution
% UG has impacts on costs and reliability. Companies vary widely across the group.
% of Customers Served
% of Distribution Circuits UG.
Mean
28 %
Quartile 1
16 %
Quartile 2:
26 %
Quartile 3:
35 %
Source – Page 9, Statistics, Question ST35
Source – Page 14, Statistics, Question ST45

16. Remote Switching Capabilities
Companies have made different choices regarding remote switching investments, which affects response capabilities
% Customers on Primary Circuits with Remote Switching at Substation Breaker
% Customers on Primary Circuits with Remote Switching Outside the Substation
Mean 85
Quartile 1
100
Quartile 2: 98
Quartile 3: 79
Mean 25
Quartile 1 39
Quartile 2: 27
Quartile 3: 4
Source – Page 25, Statistics, Question ST100
Source – Page 26, Statistics, Question ST100

17. Demographics – Distributed Generation
Distributed Generation has had a significant impact in a few jurisdictions.
Distributed Generators per 100 Distribution Circuit Miles
Distributed Generators added last year per 100 Distribution Circuit Miles
Mean
Mean
Source – Page 12, Statistics, Questions ST30, ST45
Source – Page 8, System Activity, Questions ST45, SA12

18. Plant Investment Per Customer
Investment per customer for some companies is more than double that of others. Differences are caused by age, system demographics, and design choices.
T&D Plant in Service per Customer
Distribution Plant in Service per Customer
Mean
$4,594
Quartile 1
$3,593
Quartile 2:
$4,297
Quartile 3:
$5,680
Mean
$3,136
Quartile 1
$2,751
Quartile 2:
$3,122
Quartile 3:
$3,355
Source – Page 37, Statistics, Questions ST5, DF70, TF65
Source – Page 38, Statistics, Questions ST5, DF70

19. Distribution Lines Spending Profile
Continuing a trend, O&M spending is down from last year, while capital investment increased.
2015YE
2014YE
Mean Q1 Q2 Q3
Bars
O&M
Distribution O&M Expense per Customer
$80.40
$60.98
$75.08
$97.49 28
$85.00
$63.68
$82.30
$105.20 16
Distribution O&M less Veg Mgmt per Customer [Activity-based]
$51.69
$36.06
$44.49
$61.87
$68.65
$52.63
$66.31
$79.31 17
Distribution O&M per circuit miles
$3,899
$1,313
$3,017
$5,337
$4,353
$3,188
$4,392
$5,776 14
Distribution O&M per MWh
$3.23
$2.18
$3.24
$3.95
$3.47
$2.81
$3.28
$4.41 15
Distribution O&M Expense per Distribution Assets
2.61%
1.96%
2.38%
3.13%
2.88%
2.20%
2.85%
3.58%
Distribution O&M less Veg Mgmt per Total Dist. Assets [Activity-based]
1.67%
1.30%
1.52%
1.79%
2.08%
1.58%
1.89%
Capital
Distribution Line Capital Additions per Asset [FERC]
5.36%
6.00%
4.97%
4.19%
4.96%
5.73%
4.90%
3.87%
Distribution Line Capital Spending less Serve New, Expand per Asset [Activity Based]
4.62%
3.98%
3.47%
4.35%
4.76%
3.82%
3.52%
Distribution Line New Service Spending per New Service Location
$8,202
$2,848
$4,983
$10,003 11
$5,700
$2,164
$2,810
$9,871 18
Sustainment Spending
Distribution Line Sustaining O&M and Capital Spending per Asset [Activity Based]
5.80%
6.57%
5.16%
4.79%
5.40%
6.56%
4.99%
4.32%
Profile values and counts may differ from report values and counts due to the exclusion of companies that did not provide complete data sets.

20. Total Distribution Capital Spending and O&M Spending (FERC)
Most companies spend more capital than O&M. With CAPEX increasing and O&M decreasing, the gap is widening.
Spending per Customer
Spending per Asset
Mean
$247.37
Quartile 1
$201.88
Quartile 2:
$222.25
Quartile 3:
$281.36
Mean
7.98 %
Quartile 1
6.22 %
Quartile 2:
7.97 %
Quartile 3:
9.40 %
DF page 3 – Questions DF5, DF20, ST5
DF page 5 – Questions DF5, DF20, DF70

21. O&M Expenses (FERC) Per Customer
O&M spending at the high end is over double that of the lowest spenders
O&M Expenses per Customer
Mean
$80.40
Quartile 1
$60.98
Quartile 2:
$75.08
Quartile 3:
$97.49
The community reduced average O&M expenses per customer by 6% from 2014 to 2015.
DF Page 12 –Questions DF20, ST5

22. O&M Expenses (FERC) Per Asset
There is a wide range in spending levels across the community.
Percentage of Expenses per Asset
Mean
2.61 %
Quartile 1
1.96 %
Quartile 2:
2.38 %
Quartile 3:
3.13 %
Average O&M expenses per asset went down 6 % from 2014 to 2015, following a similar decline the previous year.
DF 14 – Questions DF20, DF70

23. Distribution Line O&M Spending (Activity-Based)
Planned maintenance activities of Equipment Inspection & Maintenance and Vegetation Management were the largest categories of O&M, each exceeding Service Restoration this year.
Source: DF60, ST5

24. O&M Expenses (Activity-Based)
Half or more of the O&M budgets at most companies are devoted to Equipment Inspection and Maintenance, Vegetation Management and Service Restoration.
Expenses per Asset
Expenses per Asset, Excl. Vegetation
Mean
2.62 %
Quartile 1
1.96 %
Quartile 2:
2.38 %
Quartile 3:
3.00 %
Mean
1.99 %
Quartile 1
1.41 %
Quartile 2:
1.87 %
Quartile 3:
2.27 %
DF Page 37 – Question DF60, DF70
DF Page 38 – Question DF60, DF70

25. Vegetation Management Expenses
The relative impact of Vegetation Management expenses varies widely across the community
Veg. Mgmt O&M per OH Circuit Mile
Veg. Mgmt O&M as % of Total O&M
Mean
$1,352
Quartile 1
$450
Quartile 2:
$895
Quartile 3:
$1,504
Mean
23.35 %
Quartile 1
15.06 %
Quartile 2:
19.89 %
Quartile 3:
29.24 %
DF Page 69 – Question DF60, ST35
DF Page 68 – Question DF60

26. Capital Spending (FERC) Per Customer
Most companies invested $100 to $175 on capital projects per customer, with a few even higher.
Spending per Customer
Capital spending per customer has been increasing steadily since The average increased 14% last year
Mean
$166.97
Quartile 1
$179.80
Quartile 2:
$144.49
Quartile 3:
$127.94
DF Page 7 – Question DF5, ST5

27. Capital Spending (FERC) per Asset
Most companies invested between 3-7% per asset, with a few above 8%.
Spending per Asset
Mean
5.36 %
Quartile 1
6.00 %
Quartile 2:
4.97 %
Quartile 3:
4.19 %
Average Capital spending per asset increased 8% over last year
DF Page 9 – Question DF5, DF70

28. Distribution Line Capital Spending (Activity-Based)
Our T&D community’s capital spending to sustain and improve the distribution system significantly exceeded capital investments related to new customers and increased loads.
Source: DF50, DF70

29. Sustain Capital Spending
Sustaining capital investments have continued to increase steadily since 2011
Capital Spending Per Asset
Spending Category
2011YE Q2
2012YE
2013YE Q2
2014YE
2015YE
Pages
Total Capital Spending (ABC)
4.82%
4.33%
5.18%
6.02%
6.01% 20
Less Serve New
1.34%
0.81%
1.84%
1.52%
1.53%
Subtotal Cap Add & Sustain
3.48%
3.52%
3.84%
4.50%
4.48% 22
Less Capacity Adds
0.97
0.51%
0.68%
0.50%
Subtotal: Sustain
2.51%
3.01%
3.14%
3.82%
3.98% 23
Source: DF50, DF70

30. All quartiles dropped in the past year.
New Business Capital
New business investment rates vary substantially between companies – from 0.3% to 2.25% per asset
All quartiles dropped in the past year.
Mean
1.00%
Quartile 1
1.20%
Quartile 2:
0.93%
Quartile 3:
0.60%
Source – Questions DF50, D70

31. Sustaining versus Growth Capital Investment
New Business remains a small % of the total capital investment. Sustaining Capital investment is significantly larger than all forms of growth capital investment.
Mean
$195.60
Quartile 1
$222.66
Quartile 2:
$174.92
Quartile 3:
$137.47
Mean
6.17 %
Quartile 1
7.11 %
Quartile 2:
6.01 %
Quartile 3:
4.63 %
Source – Page 21, Distribution Financial, Questions DF50, DF70
Source – Page 18, Distribution Financial, Questions DF50, ST5

32. Staffing And Outsourcing – Distribution
2016 Transmission & Distribution Benchmarking
Community Insights Conference
Staffing And Outsourcing – Distribution
August 22-25, 2016
Park City, UT

33. Wages rates & Headcounts
Average wage rates decreased last year.
FTE counts are steady
Staffing SO10, Pg 5
Staffing SO15, Pg 9

34. Dist Line Staffing per $100M Assets
Internally, utilities average 27 FTEs per $100M Assets. When outsourcing is included 6 more people are utilized. The relative position of most companies is unchanged.
Internal FTEs only
Outsourcing FTEs estimated
Mean*
27.26
Quartile 1
21.97
Quartile 2:
26.21
Quartile 3:
31.38
Mean
34.51
Quartile 1
25.79
Quartile 2:
34.28
Quartile 3:
39.78
Staffing pg 9, SO15
Means adjusted
Includes an estimate for outsource FTEs except for vegetation mgmt. Companies where we couldn’t reasonably estimate outsourcing FTEs were excluded.

35. Distribution Staffing Per Asset
Field C&M
Engineering & Design
Mean
4.56
Quartile 1
3.79
Quartile 2:
4.49
Quartile 3:
5.94
Mean
18.77
Quartile 1
10.98
Quartile 2:
17.60
Quartile 3:
21.82
Includes an estimate for outsource FTEs except for trans line construction and vegetation mgmt.

36. Distribution Staffing Per Asset
Trouble / Operations
Misc
Mean
6.58
Quartile 1
3.75
Quartile 2:
5.84
Quartile 3:
8.10
Mean
4.60
Quartile 1
3.04
Quartile 2:
4.13
Quartile 3:
6.17
Includes an estimate for outsource FTEs except for trans line construction and vegetation mgmt.

37. Distribution FTEs per Distribution Circuit Miles
Internal FTEs only
Outsourcing FTEs estimated
Mean 4.11
Quartile 1: 1.31
Quartile 2: 2.97
Quartile 3: 3.90
Mean
8.87
Quartile 1
4.27
Quartile 2:
5.07
Quartile 3:
7.13
Includes an estimate for outsource FTEs except for vegetation mgmt. Companies where we couldn’t reasonably estimate outsourcing FTEs were excluded.

38. Distribution Staffing Findings
Regression analysis was performed to determine the correlation between various system demographics and staffing. Among the key predictors were distribution circuit miles, MWh sold, and customers.
Includes an estimate for outsource FTEs

39. Outsourcing Levels – Field C&M
Legends 21 23 27 28 30 31 38 39 47
Field Construction (Total)
60 %
37 %
20 %
68 %
7 %
23 %
35.88
Overhead line construction and relocations
30 %
65 %
25 %
40.6
URD underground line construction and relocations
75 %
0 %
45 %
15 %
36.67
New service installations
1 %
50 %
34 %
95 %
10 %
31.67
Concrete manhole or conduit system construction
100 %
90 %
40 % 90
Field Maintenance (Total)
5 %
26 %
57 %
37.67
Pole inspection 80
Pole treatment or reinforcement
71.57
Pole replacements
41.6
Street Light Installation
43.33
Street light maintenance
80 %
36.83
Soft surface or yard restoration
85 %
87.14
Hard surface or paving restoration
89.29
Staffing & Outsourcing Pg 60; Source: SO115 39

40. Outsourcing Levels – Engineering & Design
Legends 21 23 27 28 30 31 47
Protection Metering and Controls
0 %
5 %
0.83
Engineering Standards
25 %
4.21
Asset & System Health & Reliability
2 %
0.26
OH or UG service design
7 %
6.3
OH or UG line design
20 %
45 %
50 %
22.98
Smart Grid 8
Distribution Planning 1
Large Capital Project Engineering
53 %
17.17
Engineering & Design Breakdown Unavailable
Staffing & Outsourcing Pg 62; Source: SO115 40

41. Outsourcing Levels – Other
Legends 21 23 25 27 28 30 31 38 47
Trouble or Operations
0 %
21 %
8 %
30 %
8.4
Operations Center(s)
3 %
0.36
Work Management
ROW and Vegetation Management
100 %
50 %
98 %
85 %
92.51
Capital Project Management
5 %
26 %
10 %
5.86
Distribution Shops
15 %
16.43
Meter Shop
6 %
0.8
Meter Field Operations
25 %
4.17
Safety
1 %
0.17
Training 6
Mapping
93 %
19.65
Damage Prevention or Facility Locating
90 %
38 %
85.5
Joint use organization
Information Technology
40 % 8
Other
33.33
Staffing & Outsourcing Pg 63; Source: SO115 41

42. LABOR UTILIZATION RATES BY JOB CLASSIFICATION
Line Worker
Troubleshooter
Mean
73%
Quartile 1
81%
Quartile 2:
79%
Quartile 3:
72%
Mean
73%
Quartile 1
82%
Quartile 2:
81%
Quartile 3:
79%
Staffing & Outsourcing Pg 49, 50; Source: SO90

43. AVERAGE Hours OF Overtime* PER FIELD C & M EMPLOYEE
Distribution Line Worker
Distribution Troubleshooter
Mean
391
Quartile 1
237
Quartile 2:
322
Quartile 3:
544
Mean
490
Quartile 1
323
Quartile 2:
561
Quartile 3:
697
Mean
458
Quartile 1
287
Quartile 2:
332
Quartile 3:
622
Staffing & Outsourcing Pg 30; Source: SO65
Staffing & Outsourcing Pg 31; Source: SO65
*(Excluding Major Events)

44. Thank you for your Input and Participation!
Your Presenters
Ken Buckstaff
Debi Cook
Gene Dimitrov
Rob Earle
Dave Canon Dave Carter Dave Weiler
About 1QC
First Quartile Consulting is a utility-focused consultancy providing a full range of consulting services including continuous process improvement, change management, benchmarking and more. You can count on a proven process that assesses and optimizes your resources, processes, leadership management and technology to align your business needs with your customer’s needs.
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