This case study is an overview of the actions taken by PG&E to transform its Gas Operations and begin rebuilding its reputation following the explosion of a gas transmission line in San Bruno, CA (near San Francisco). This incident is relevant because the actions taken and the lessons learned are applicable to all gas operations worldwide to ensure catastrophic preventable incidents like this do not occur in the future including ISO 55000 and Strategic Asset Management

1. © 2018 Andrew James Advisory Group and AffiliatesSlide 1
Case Study on San Bruno
Learning from a Disaster

2. © 2018 Andrew James Advisory Group and AffiliatesSlide 2
Introduction & Scope
•This case study is an overview of the actions taken by
PG&E to transform its Gas Operations and begin
rebuilding its reputation following the explosion of a
gas transmission line in San Bruno, CA (near San
Francisco).
•This incident is relevant because the actions taken and
the lessons learned are applicable to all gas operations
worldwide to ensure catastrophic preventable incidents
like this do not occur in the future.

3. © 2018 Andrew James Advisory Group and AffiliatesSlide 3
What Happened ?
•On September 9, 2010 a combination of events took place that
individually might have been resolved with little to no consequence
but together resulted in a perfect storm culminating in a 30 inch
diameter gas transmission line exploding in San Bruno, CA destroying
30+ homes and killing 8 people. The pipeline was right under the
neighbourhood and was owned by Pacific Gas & Electric (PG&E).
•Investigations, penalties, etc.
•Multiple NTSB / PUC/ Independent Review /Internal etc.
•$1.6 Billion in Fines
•$2.6 Billion Share Holder Money invested in the
Rebuild/Restructure
•Over 351,000 articles identified on a Google search

4. © 2018 Andrew James Advisory Group and AffiliatesSlide 4
What Worked
• Faced with the aftermath of the explosion, PG&E, with total active/visible
support from its Board of Directors and upper management, took the
following actions to change how PG&E would do business from that day
forward to drive towards “Best in Class’;
I) Initial changes
• Separated Gas and Electric operations organizations
• Previously they were intermingled
• Separate Profit Centers
• Hired a new leadership team from across the industry and the
country
• Established a new Gas Operations organization structure

5. © 2018 Andrew James Advisory Group and AffiliatesSlide 5
What Worked contd.
II) Wide range of focus on improvements
•Extensive infrastructure investment (Shareholder
Investment)
•Redesigned their risk and asset management systems
•Risk based rate case proposals
•Emergency planning
•Records management systems
•They put 3,500 leaders at all levels of PG&E through
safety training and they reviewed the lessons of San
Bruno with every new employee.

6. © 2018 Andrew James Advisory Group and AffiliatesSlide 6
What Worked contd.
III) Gas Safety Excellence
• Safety management system & Certifications (for each area of the graphic below)
• Partnered with local organizations to create a 6 week program for entry level field roles,
i.e., linemen, technicians and mechanics, etc. many of whom are ex military
• Centerline Accuracy of within 10ft for 6700 mi of transmission lines
• Completed the decommissioning of more than 800 miles of cast-iron pipe in their system,
replacing with stronger, more efficient and seismically sound pipe.
• Built a new gas operations control center, employing the most advanced technology,
from which we can monitor the entire system and respond more quickly and effectively to
emergencies.
• They're using new gas leak detection technology that is 1,000 times more sensitive than
before in order to help find and fix leaks before they become a problem. When a
customer calls to report a gas odor, they are now among the fastest in the entire industry
in responding.

7. © 2018 Andrew James Advisory Group and AffiliatesSlide 7
What Worked contd.
III) Gas Safety Excellence
• As of 2016, they have closed out 11 of 12 recommendations from the National
Transportation Safety Board and work on the remaining one is on track.
• In addition, the company has settled claims amounting to more than $500 million with
the victims and families of the San Bruno accident, established a $50 million trust for the
City of San Bruno for costs related to recovery and contributed $70 million to support
the city's and community's recovery efforts.
• As a result of the concrete actions taken above the company has made safety the
cornerstone of its culture following the San Bruno explosion. PG&E became one of the
first utilities ever to earn two of the highest internationally recognized asset management
certifications—the International Organization for Standardization (ISO) 55001 and
Publicly Available Specification (PAS) 55-1.

8. © 2018 Andrew James Advisory Group and AffiliatesSlide 8
What Did Not Work
•All actions taken had their fits and starts but
there were no abject failures. All actions were
necessary and the plan was well communicated.
Thanks to the visible support from upper
management, a can do culture was reinforced.
The effort was so immense and the time frame so
short that the focus was always to keep moving
forward and to make it right.

9. © 2018 Andrew James Advisory Group and AffiliatesSlide 9
Lessons Learned
•What happened in San Bruno highlighted a deadly
combination of factors that resulted in tragedy, but the
lessons learned from this disaster need to be applied to
the pipeline safety landscape across the country. With
roughly half of America’s gas transmission lines built prior
to 1970, many factors including aging infrastructure,
legacy material properties and construction practices,
historical record keeping practices, as well as interacting
threats such as land movement and the environment
around the lines, all contribute in different ways to the
risks associated with these pipelines.

10. © 2018 Andrew James Advisory Group and AffiliatesSlide 10
In Summary
The following lessons need to be taken seriously to prevent similar events from occurring
elsewhere in the US.;
• The national response to implementing top-notch integrity management programs to
understand and mitigate risks on our pipelines needs to move faster and be more
coordinated. This includes such actions as the installation of automatic or remote shutoff
valves to control the flow of gas should a problem occur.
• It’s not enough to just meet the letter of the law; you need to exceed the requirement
whenever possible if it means risks can be reduced in an effective manner.
• Invest Now or Pay Later - - We shouldn’t wait to implement improvements!
• Infrastructure of every type needs to be identified and tracked via scrupulous record-
keeping, and regular, risk based testing is a must.
• Meaningful improvements to pipeline safety culture need to move from reactive to
proactive and rise above simply complying with the basic minimum standards of
regulation.

11. © 2018 Andrew James Advisory Group and AffiliatesSlide 11
Contributor & More Information
• The following online articles are just a few of the articles that can provide insight as to
the events leading up to the incident, the level of destruction and the investigation that
lead to one of the largest fines ever levelled against and utility;
• https://en.wikipedia.org/wiki/2010_San_Bruno_pipeline_explosion
• http://pgeresponds.com/wp-content/uploads/2014/03/3-29-14-rev-PGE-Background.pdf
• http://www.pgecurrents.com/2013/09/12/video-pge-opens-state-of-the-art-gas-control-
center-in-san-ramon/
• http://www.pgecurrents.com/2014/05/02/video-innovative-gas-leak-detection-
technology-combined-with-super-crews-result-in-improved-safety-efficiency/
• https://safetycompass.wordpress.com/2012/04/06/invest-now-or-pay-later-lessons-
learned-from-san-bruno/
• Boyd Beal , Principal, Andrew James Advisory Group
boyd.beal@andrewjamesadvisory.com