Measuring Our Performance

In 2011, PG&E continued to improve our reliability according to industry-accepted performance measures. In fact, we achieved our best results on record, reducing the average frequency of electric outages, or SAIFI, to the lowest level to date, including an improvement of more than 12 percent over 2010. Compared to 2008, there were approximately 1 million fewer customer interruptions in 2011.

And when the lights did go out for our customers, the wait time to get power restored, or CAIDI, was also shorter: average outage duration in 2011 was 4 percent less than in 2010. Although that was an improvement over 2010 results, it fell short of our target. The average outage duration for each customer served, or SAIDI, exceeded our 2011 goal.

Additionally, beginning in 2012, in an effort to help ensure consistency with industry standards, PG&E will include both planned and unplanned outages in setting targets and measuring performance for reliability; previously, planned outages were not included.

Modernizing Our Electric Operations

Our improved performance was the result of strategic planning, smart investments and efficient execution on projects both big and small across our service area. Four current programs, in particular, contributed to the reliability gains we achieved:

• Repairing or replacing the 400 worst-performing electric circuits in our service area. After addressing 83 of these circuits in 2010, PG&E repaired an additional 80 in 2011. In 2010, reliability of the upgraded circuits improved by more than 50 percent, and we expect similar gains as a result of the work completed in 2011.
• Replacing the cables and wires that carry power to customers. In 2011, PG&E replaced more than 77,000 feet of underground cable, primarily in San Francisco and Oakland, and an additional 53,000 feet of overhead wire. The new cables and wires will be less prone to failure and therefore more reliable, making PG&E’s electric system safer for the public and for our employees to maintain and operate.
• Working to keep our transmission and distribution lines free from trees and bushes that could cause outages. In 2011, PG&E inspected more than 130,000 miles of overhead high-voltage line and more than one million trees to help ensure the safe delivery of electricity. As a result of this work, there were 128,000 fewer customer interruptions due to tree-related outages in 2011 than in 2010.

• Proactively upgrading and replacing equipment at our substations. High voltage electric power, which is transmitted on transmission lines, enters our substations and is transformed to a lower voltage before being delivered to homes and businesses on distribution lines. In 2011, PG&E installed or replaced 31 substation transformers to improve reliability and provide capacity to accommodate growing demand.

  We also embarked on an ambitious program to automate existing substation equipment, which will enable PG&E to more quickly restore service when it is interrupted.

Committed to Continuous Improvement

PG&E recognizes that its work to provide reliable electric service is far from finished. As part of our back to basics approach, we are focused on making strides in six key areas: public and system safety, employee safety, reliability, compliance, customer service and work efficiency.

Last year, Pacific Gas and Electric Company became one of the first utilities in the nation to employ a new technology for manhole covers, which improves public safety. The program, which kicked off in San Francisco and Oakland, will replace traditional manhole covers with ones that stay in place and open a few inches during a power outage incident. This allows fumes from the underground system to safely vent. Their design also prevents oxygen from rushing into belowground enclosures and potentially igniting a fire. In 2011, PG&E installed 690 of these advanced covers, with an additional 800 planned for 2012.

To better deliver in each area, we restructured our electric operations organization in 2011 to create clear lines of accountability and facilitate more flexible decision-making at the local level. Additionally, to better measure our performance and understand industry best practices, we performed extensive benchmarking with other utilities. With that information in hand, our teams developed comprehensive performance plans and are putting them into action.

We are working to create a climate where employees actively raise safety concerns, increasing the training our employees receive on key work procedures, improving coordination with local emergency responders and mitigating risks such as those posed by downed electric lines, redesigning work processes and leveraging existing technology, rolling out new technologies and applications for our customers and enhancing our weather modeling to respond more quickly to outages.

In 2012, we are working to accelerate pole replacement and maintenance of our overhead and underground facilities as well as fast-tracking technological upgrades. This includes a specific focus on increasing the use of SCADA—wireless devices that allow PG&E to monitor the health of our electric system in real time and respond more quickly to power disruptions.

Building a Smarter Grid

PG&E understands that the nation’s utilities have an obligation to build a better grid for their customers to deliver safe and reliable electricity as well as to advance energy policy goals such as the integration of renewable energy resources onto the electric grid system. Today, there are promising new technologies that, once diligently tested and piloted on a small scale, can be deployed on a larger scale to electric operations and yield significant benefits.

At PG&E, our Smart Grid vision is consistent with our strategy to introduce proven, sophisticated technology into the business to be able to better serve our customers. The ultimate goal is to create a flexible grid that:

• allows customers to understand their energy usage and be empowered to make energy related choices;
• enables new sources of energy (such as distributed generation and storage, rooftop solar and other energy market participants) to be fully integrated and a functioning part of the grid; and
• allows utilities to continue to operate the grid safely and deliver reliable, cost-effective electricity in the face of more complex and interdependent energy operations.

Careful planning is essential to help ensure that Smart Grid investments are beneficial for our customers and also advance California’s energy policy goals. As a major milestone, PG&E provided the CPUC with its Smart Grid Deployment Plan in 2011.  The plan proposed 21 Smart Grid projects that are projected to yield significant benefits, including:

• Avoided capital investment, operations and maintenance and avoided energy procurement costs,
• Reduced system outages and outage duration, and
• Reduced greenhouse gas emissions and other environmental benefits.

Pending regulatory approval, we plan a prudent rollout of these new Smart Grid technologies, piloting and testing them to understand their capabilities and limitations before implementing them system-wide. The Smart Grid investments will build on the foundation laid by the millions of SmartMeter™ devices installed at customers’ homes and businesses, as well as PG&E’s existing technology investments in distribution automation to fully leverage already-installed technology. We will also continue to rely on the input of our customers to inform our direction as we move forward.

PG&E’s Smart Grid Strategy

PG&E’s Smart Grid plan is based on four program areas, with 10 underlying strategic objectives, to guide activities over the next decade.