Corporate Responsibility and Sustainability Report 2016

Our Approach

Embedding Safety in Our Operations

Public safety is at the core of how we operate our business.

• Gas Operations: We are working across the board to strengthen our gas infrastructure and enhance our operations. Among other highlights, we became one of the first companies in the United States to meet the rigor of a new industry gold standard for pipeline safety and safety culture; completed another significant safety recommendation issued by the National Transportation Safety Board following the San Bruno accident by finishing the installation of 235 automatic and remote controlled valves; and broke ground on a new Gas Operations Technical Training Center.
• Electric Operations: PG&E’s focus remains on reducing the incidences of downed wires in our service area, integrating the latest in technology to monitor our electric lines and improve our ability to respond more quickly to outages, and proactively managing vegetation surrounding our electric lines to protect the infrastructure and surrounding communities.
• Energy Supply: We remain strongly committed to the highest levels of safety, performance and security at Diablo Canyon. We also continue to inspect and maintain our hydroelectric system according to strict safety guidelines, and to enhance public safety outreach in communities around our facilities.

Emergency Preparedness

PG&E’s 70,000-square-mile service area covers regions prone to earthquakes, wildfires, heavy rains and gusting winds. To prepare for major weather events and natural disasters, we have implemented an enterprise-wide Emergency Management Advancement Program (EMAP) to review and strengthen our catastrophic emergency response plans.

The program, led by our Emergency Preparedness and Response organization, focuses on:

• Clearly defined organizational structures, roles and responsibilities
• Restoration priorities that incorporate community needs to help customers begin returning to normal life
• Effective logistics plans that support restoration needs
• Technology that is ready and available to support our response
• Employees who are trained and fully understand their emergency roles
• Employees who are personally prepared for emergencies and ready to respond at home and at work

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2015 Milestones

First Responder Collaboration and Assistance

PG&E prioritizes coordination and communication with police, fire and other officials during emergency situations in an effort to keep the public and first responders safe. Our emergency response plan—which is developed, shared and tested with emergency officials—defines clear lines of responsibility for PG&E and emergency personnel. PG&E also maintains a secured First Responder website where emergency officials can access training materials and gas transmission infrastructure information and maps.

PG&E donates rapid response truck on anniversary of Napa quake

One year after a powerful earthquake shook homes and buildings in the city of Napa, residents, business leaders and other community members came together to commemorate the temblor and remember the lives changed and lost. At the event, PG&E donated a next-generation, emergency response pickup truck to the city’s fire department and invited local residents to have a personal preparedness plan. PG&E also emphasized the value of partnering with local cities, counties and first responders in emergency response.

Highlights from last year included:

• Partnered to prepare for fire season. PG&E electric operations field supervisors and superintendents met with the National Weather Service, CAL FIRE, California Office of Emergency Services, U.S. Forest Service, Bureau of Land Management and the National Parks Service. During the meeting, we shared our plans and learned of the threats to PG&E’s infrastructure and facilities, allowing staff to better prepare and respond to fire danger in collaboration with outside agencies.
• Used daily air patrols to help detect wildfires and assist state and local fire agencies with early fire detection and response to stop fires from spreading. During the four months PG&E operated the flights as part of its drought emergency response, the patrols spotted 146 fires and in 25 instances were the first to report the fire to CAL FIRE or the U.S. Forest Service. Early detection of smoke or fire allowed fire agencies to quickly respond to accurate locations and put out fires before they spread.
• Hosted nearly 700 training workshops facilitated by our public safety specialists to better prepare firefighters, police, public works officials and other authorities to respond to emergencies involving electricity and natural gas. We also met with many of the fire departments in our service area with PG&E gas transmission or distribution facilities located in their region.

Community Outreach and Partnerships

We work collaboratively with community partners that share our focus on emergency preparedness. Examples include:

• Announced the Better Together Resilient Communities grant program, a shareholder-funded initiative that will invest $1 million over five years to support local planning efforts to help better prepare for, withstand and recover from extreme events and other risks related to climate change, such as sea level rise, flooding, land subsidence, heat waves, drought and wildfires.
• Continued our partnership with the American Red Cross, contributing $1 million to build safer, more disaster resilient communities across Northern and Central California. The donation was used to support the Home Fire Preparedness Campaign, a multi-year home safety program that will help save lives and enhance safety in underserved communities.
• Awarded wildfire prevention grants to local Fire Safe Safety Councils. The grants marked the third consecutive year PG&E partnered with local California Fire Safe Councils to fund shovel-ready projects. The money provided in 2015 was used to protect communities from wildfires in at least 18 high fire-risk counties by clearing brush and dead, dying or diseased trees.

Public Safety Awareness

Educating the public about working safely around our systems and facilities, and on how to stay safe during emergency events, remains a key element of our public safety strategy. Last year, this included:

• Emphasized the importance of calling 811 before any excavation project, with outreach around National Safe-Digging Month, California Arbor Week and National 811 Day. PG&E also urged the U.S. natural gas industry to increase contractor education and outreach about the significant safety risks associated with reckless digging and to step up enforcement of companies that don’t follow the law.
• Sponsored the 11th-annual California Day of Preparedness. Hosted by the Governor’s Office of Emergency Services, the event featured demonstrations by the Sacramento Certified Emergency Response Team, a swift water rescue by Sacramento County Sheriff’s Drowning Accident Rescue Team, PG&E gas and electric safety demonstrations, and emergency response vehicles.
• Supported CAL FIRE broadcast, print and billboard advertising to make homeowners aware that bark beetles are killing millions of trees in California, which then become fuel for fire, and to educate residents on how to safely take action.
• Joined forces to host an El Niño preparedness workshop for Spanish-speaking residents, working in collaboration with the City of Santa Cruz, Santa Cruz Seaside Company, the American Red Cross and local agencies. Additionally, PG&E hosted El Niño preparedness media roundtables in the Bay Area, Sacramento and San Luis Obispo that featured the Red Cross and first-responders and a wires-down safety demonstration.
• Conducted interactive electric and gas safety demonstrations using a traveling display that allows instructors to show potential hazards associated with gas and electric facilities to students, youth groups, contractors, emergency personnel and customers. PG&E gas and electric professionals held more than 2,900 demonstrations in communities throughout our service area.

Cybersecurity

As we integrate more Internet-connected technologies into our electric system to create a smarter grid, the importance of cybersecurity continues to increase—for PG&E and our customers. In fact, the U.S. Department of Homeland Security has classified utility assets as a key resource and critical infrastructure for our national and economic security. PG&E is firmly committed to working with other gas and electric providers, other essential industries and government officials to develop and implement state-of-the-art cybersecurity strategies and best practices.

Our efforts are led by an in-house Cybersecurity Team, headed by the Utility’s Senior Director of Cybersecurity. This team of security and operations experts continuously identifies, evaluates and mitigates cybersecurity risks across the enterprise.

Identifying and evaluating cybersecurity risks revolves around understanding business processes and core enabling technologies, while providing ongoing monitoring of our infrastructure and external threat landscape. Once risks are identified and prioritized, we develop mitigation plans to ensure an acceptable level of risk exposure.

Cybersecurity training and awareness continue to be a major focus for all employees and contractors, with all PG&E employees required to take an annual information security and privacy awareness course. Leaders are subject to additional coursework to further integrate cybersecurity awareness into our culture.

Physical Security

PG&E is increasingly focused on the physical security of our assets and infrastructure. In 2013, gunshots caused extensive damage to PG&E’s Metcalf substation near San Jose. Although no one was hurt and there were no customer outages as a result, we have worked collaboratively with agencies at the federal, state and local levels to enhance the security of critical substations across our service area.

Improvements underway at multiple substations include the installation of new barriers at the perimeter and shielding for certain equipment. We are also installing state-of-the-art security equipment designed to detect and deter a range of potential threats.

PG&E is also designing and installing physical security enhancements at certain gas facilities, similar to what is being done at multiple substations. In 2015, PG&E completed construction of a new Security Operations Center as a complement to physical security enhancements being made at electric substations, gas facilities and other sites. We expect to break ground on a larger center in 2016, designed to accommodate PG&E’s physical security monitoring needs for years to come.

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Measuring Progress

PG&E measures performances on a set of public safety metrics to track progress on goals set each year with continuous improvement in mind. In 2015, we improved in a number of areas, including our performance in repairing gas leaks and our average response time to gas and electric emergencies.

In addition, safety results continue to represent the largest portion of at-risk performance-based cash compensation, at 50 percent. Financial performance and customer service each represent an additional 25 percent.

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Looking Ahead

Public safety remains a core value at PG&E. To maintain our focus on this crucial area of our business, we plan to continue to identify and prioritize assets to be upgraded or replaced, leverage emerging technology to maintain our international and industry certifications for gas safety and asset management, and work proactively within our communities and with first responders to improve emergency readiness.

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