Corporate Responsibility and Sustainability Report 2017

Our Approach

Embedding Safety in Our Operations

Public safety is a foundational principle underlying every one of our operational decisions.

• Gas Operations: Every day, PG&E takes steps to build the safest and most reliable gas system in the nation. Reflecting this commitment, we remain focused on maintaining our certifications and compliance with standards across best-in-class asset management, pipeline safety management systems and safety culture, and end-to-end safety processes.
• Electric Operations: PG&E continues a broad-based approach that includes working to improve our response time to 911 calls, support the prevention of distribution conductor failures resulting in downed wires and proactively manage vegetation surrounding our electric lines to protect the infrastructure and surrounding communities.
• Energy Supply: PG&E remains strongly committed to the highest levels of safety, performance and security at Diablo Canyon Power Plant, as demonstrated during the site’s scheduled refueling and maintenance cycle in 2016. We also continue to inspect and maintain our hydroelectric system according to strict safety guidelines, including exploring the use of drones, and to enhance public safety outreach in communities around our facilities.

Emergency Preparedness

To prepare for major weather events and natural disasters—earthquakes, wildfires, floods, heavy winds and blizzards—PG&E leverages our enterprise-wide Emergency Management Advancement Program, through which we continually review and strengthen our catastrophic emergency response plans.

The program, led by our Emergency Preparedness and Response organization, ensures that we have:

• 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, and
• Employees who are personally prepared for emergencies and ready to respond at home and at work.

2016 Milestones

Wildfire and Storm Preparation

PG&E works year-round to prepare for extreme weather events through advance planning, new initiatives and the incorporation of state-of-the-art technologies.

Highlights from last year included:

• Prepared for fire season by working with local contractors to remove trees felled by drought and bark beetles, and increasing from five to 16 the number of retardant-equipped-trailers PG&E uses to pretreat power poles with fire retardant. PG&E also incorporated new meteorology technology to forecast fire dangers and to determine when to incorporate our Fire Prevention Plan.
• Prepared for winter storm season by planning a combination of local responses and system-wide capabilities. PG&E established preparation measures such as advanced weather forecasting and localized resource planning; upgraded our Mobile Command Vehicles; prepared scalable response base camps called “microsites”; and increased the inventory of mobile generators to better respond to storm-affected communities.

First Responder Collaboration and Assistance

In an emergency situation, our first priority is to protect the health and welfare of the public. We do that by coordinating and communicating with police, fire and other officials 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 secure First Responder website, where emergency officials can access training materials and gas transmission infrastructure information and maps.

Highlights from last year included:

• Used daily air patrols to help detect wildfires. From June to October, PG&E conducted daily aerial fire patrols to support state and local fire agencies with early fire detection and response. The patrols flew five routes seven days a week from mid-afternoon until dusk, which is the time of day wildfires are most likely to start. Early detection of smoke or fire allowed fire agencies to quickly respond to accurate locations and put out fires before they spread.
• Hosted nearly 600 training workshops to better prepare firefighters, police, public works officials and other authorities to respond to emergencies involving electricity and natural gas. We also met with local fire departments to discuss PG&E gas transmission or distribution facilities located within their district.

Community Outreach and Partnerships

We regularly work with community partners to better prepare for emergencies. 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 $2 million in wildfire prevention grants to local Fire Safe Councils. The grants marked the third consecutive year PG&E partnered with local California Fire Safe Councils to fund shovel-ready projects. The money was used to protect communities from wildfires in 18 high-fire-risk counties through projects such as 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 and National 811 Day. Additionally, farm operators received a workshop on avoiding contact with gas and other underground infrastructure.
• Emphasized safety around downed power lines by providing safety tips online and through an extensive public advertising campaign. PG&E also urged customers to have a storm preparation plan and provided instructions on how to create an emergency supply kit.
• 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. Dozens of other state and local agencies, first responders and interested groups offered plentiful preparedness tips.
• Supported Cal Fire’s “Prepare for Bark Beetle” campaign. PG&E supported Cal Fire’s efforts to warn homeowners of the dangers of trees impacted by bark beetles. Four million customers received the messages in their paper billing envelopes, and 1.7 million e-bill customers received information as a bill insert.
• Provided safety tips for securing metallic balloons. During graduation season, PG&E urged customers to make sure helium-filled metallic balloons were secured with a weight to prevent them from coming into contact with overhead power lines and causing a public safety risk. PG&E also supported legislation that would have banned the sale of balloons made of electrically conductive material.

Cybersecurity

As the use of smart grid technology increases and PG&E’s IT infrastructure grows, the need to protect these systems from cyberattacks becomes even more essential. Our IT systems manage more than 106,000 miles of electric power distribution lines, as well as our gas infrastructure. We also have internet-connected data systems that store customer information. In addition, the U.S. Department of Homeland Security has classified energy company 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 Pacific Gas and Electric Company’s Senior Director of Cybersecurity. This team of security and operations experts continuously identifies, evaluates and mitigates cybersecurity risks across the enterprise. Once risks are identified and prioritized, we develop mitigation plans to reduce risk exposure. In early 2017, the team opened a Security Intelligence and Operations Center that will operate around the clock to proactively defend PG&E from cyber threats.

Cybersecurity training and awareness continue to be key areas of focus for all employees and contractors. All PG&E employees are required to take an annual information security and privacy awareness course, and leaders are subject to additional coursework to integrate cybersecurity awareness into every part of our operations. In addition, PG&E conducts internal phishing campaigns to raise employee awareness.

Physical Security

The physical security of our assets and infrastructure is vital, and we continue to work collaboratively with agencies at the federal, state and local levels to enhance the security of critical facilities across our service area.

PG&E has installed barriers at the perimeter of our critical substations, and has increased shielding for certain equipment. We have installed 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.

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.

Measuring Progress

PG&E tracks our public safety performance via a set of public safety metrics with the aim of continuous improvement. In 2016, we strengthened our performance in a number of areas, including recording industry-leading gas and electric emergency response times.

Safety performance constitutes 50 percent of management’s annual at-risk performance-based pay. Financial performance and customer service each represent an additional 25 percent.

Looking Ahead

Our commitment to public safety will remain at the center of everything we do. We demonstrate this commitment by leveraging emerging technology in our operations, maintaining international and industry certifications for gas safety and asset management, continuing to identify and prioritize assets to be upgraded or replaced, and partnering with our communities and first responders to enhance emergency readiness.