1. The Next Generation: Succession Planning and Talent Management in a Changing World Presented by Geoff Isbell, Chief Operating Officer

2. Passing the Torch - Olympic Tradition

3. The greatest resource we have is the wealth of knowledge and experience that we can pass to the next generation… We need to pass the torch, now more than ever… It should be considered an honor to carry the flame for Natural Gas! Passing the Torch…

4. Take Away: Something to think about… 1.Challenges we face 2.Actions we must take 3.Principles we must embrace How will you pass the torch? NextGen Overview

5. 1.Awareness 2.Assessment 3.Action * The Sloan Center on Aging & Work ENERGY worldnet’s Involvement Three Necessary Steps Recruitment, Talent Management and Succession Planning:

6. Primary Challenges 1.Aging Infrastructure 2.Aging Workforce 3.Limited talent/resources 4.Increased Regulation The Challenges We Face

7.  60% of utility assets are near the end of their useful service life*  20 -25% of utility assets are past their intended service life* * CRA International report dated February 2009 Chart from DOT/PHMSA Report on Pipeline Safety Aging Infrastructure = More Work

8.  CERA estimates that the electric power industry alone will invest approximately $900 Billion for infrastructure projects over the next 15 years.* (Natural Gas will need more pipelines and facilities to meet the demand for electrical power generation)  Outlays of $10 to $20 billion per year could be required over the next 20 years to build new systems and facilities and modify existing ones to bring U.S. oil and natural gas resources to market.** *CERA – Cambridge Energy Research Associates **Curt Launer, Managing Director of Natural Resources/Deutsche Bank Aging Infrastructure = More Work

9. Aging Workforce = Fewer Workers Center for Energy Workforce Development (CEWD), 2011 Survey

10.  Average age of utility workers is currently 46.1 years old (1)  40 percent of the workforce will most likely be retiring in the next 5 years (2)  Worker shortages predicted to occur sooner in energy/utility sector than other industry sectors (3) (1) Center for Energy Workforce Development (2) Chavez, The Case for Succession Planning, 2011 (3) U.S. Department of Labor comparison Aging Workforce = Fewer Workers

11.  As 75 million baby boomers approach retirement age, a significant portion of the existing workforce will be leaving.  Beginning in 2005, around 8,000 baby boomers per day are turning 60. Since 2010, half the U.S. population is now over 50 years old. National Center for Construction Education and Research Aging Workforce = Fewer Workers

12. 40% of employers surveyed anticipate the aging of the workforce will have a negative or very negative impact on their business over the next 3 years. ** The Sloan Center on Aging & Work Aging Workforce = Fewer Workers Talent Management Study

13. 77% of employers stated that they have not analyzed the projected retirement rates of their employees, either “not at all” or “to a limited extent”. * The Sloan Center on Aging & Work Aging Workforce = More Training Talent Management Study

14. Two-Thirds (68%) of employers surveyed reported not having analyzed the demographics of their workforce, either “not at all” or only “to a limited extent”. * The Sloan Center on Aging & Working Aging Workforce = More Training Talent Management Study

15. Approximately one-third of employers surveyed reported NOT having enough programs for the recruitment (30%) and training (35%) of workers. * The Sloan Center on Aging & Work Limited Skilled Talent/Resources Talent Management Study

16. Records from the Dept. of Labor’s Bureau of Labor Statistics (BLS) show that less than 10% of the 7 million workers in our industry participate in a formal internship program. * U.S. Department of Labor, BLS Limited Skilled Talent/Resources Taking Action

17. The battle to attract our future workforce is with other industries that are all competing to attract the same pool of talent. 50% - attend college 25% - earn degree 75% - looking for employment that doesn’t require a degree. * National Center for Construction Education and Research Limited Skilled Talent/Resources Taking Action

18.  We are not attracting enough of the right workers to our industry.  It’s essential to our future that we reach out to our young people and expand career- training opportunities to them.  Career and technical education students can benefit greatly from the opportunities our industry has to offer. * National Center for Construction Education and Research Limited Skilled Talent/Resources Taking Action

19. Actions We Must Take

20. 1.Creating a Business Case a.Assess current environment b.Use Succession Planning Templates 2.Developing a Comprehensive Plan a.Assessment Centers b.Talent Pools c.Matching Talent with Roles 3.Knowledge Capture & Transfer a.Policy and Procedures b.Training/Apprentice Programs c.Mentoring Actions: Best Practices

21. Actions/Examples: Protocols

22. Proactive Examples 1.High School Recruitment & Apprenticeships 2.College Recruitment & Internship Programs 3.Gas Operations Schools and Assessment Centers 4.Partnerships with Technical and Community Colleges 5.Rehiring Retired Employees as Trainers & Evaluators Actions We Must Take

23. An argument for recruitment and screening: Puget Sound Energy (PSE) (from article in Western Energy Magazine –Spring 2012)  From 2008 to 2011, PSE recruited for five apprenticeship programs that focused on critical skills and functions at PSE  PSE received 3,674 applications  1,241 met basic qualification requirements (33% of applicants)  Only 500 passed required apprentice aptitude tests (<14% of applicants) Assessment Center: A Case Study

24. ALAGASCO – Alabama Gas Corp. Birmingham, AL Phase I 6 month Construction Crewman program Pre-employment Test (Hogan Personality-Auburn Univ.) Trades Experience & Mechanical Aptitude Structured Interview Process/Panel Skill Assessments every 30 days Phase II 24 month formal Apprentice Program (Journeyman/Master) Pre-Meter Construction & Service/Post-Meter Trades Experience & Mechanical Aptitude Structured Interview Process/Panel Skill Assessments every 30 days/90 days Apprenticeship: A Case Study

25. Missouri Gas Energy (MGE) partners with Metropolitan Community College: Gas Utility Technician Gas/Tech Schools: A Case Study  Provided all necessary training  Short program: Only 4 weeks  Reasonable Cost  Job placement opportunities  Good pay opportunities  NOT ENOUGH PARTICIPANTS!

26. Pacific Gas & Electric (PG&E): PowerPathway™ Partnerships: A Case Study Recognized by…  National Commission on Energy Policy as a best practice program  Clean Edge Clean Tech Job Trends as an organization to watch  White House/Skills for America’s Future initiative: PG&E's PowerPathway™ program is a distinguished leader in workforce development. Public Reference: www.pge.com/about/careers/powerpathway/about/

27. Mentoring: A Case Study

28. Mentoring – Learn the job of the man ahead of you and teach your job to the man behind you. Military – The one who gives the order leads the charge! Passing the Baton… The success or failure of the team is entirely dependent on the exchange

29. Learning Organization 1.Systems Thinking 2.Personal Mastery 3.Mental Models 4.Building Shared Vision 5.Team Learning * Peter Senge, The Fifth Discipline (1990) Principles we must Embrace

30. 1.Compelling case for change 2.Time to change 3.Help during the change process 4.Removing new/unknown barriers * Peter Senge, The Fifth Discipline (1990) Four Barriers to Change

31. A word of encouragement… “I was doing my job,” Mitchell said. “But probably at 201 meters, I heard it and I felt it.” “Faith, focus, finish. Faith, focus, finish.” “That’s the only thing I could say to myself.” Legacy of Leadership

32. Questions & Comments Contact Info: Geoff Isbell Chief Operating Officer ENERGY worldnet, Inc. Email: geoff.isbell@energyworldnet.comgeoff.isbell@energyworldnet.com Cell/Text: 940-399-9653 Office: 940-626-1941www.energyworldnet.com Thank You.