PG&E Pipeline Safety Enhancement Program (PSEP) Review Northern California Pipe Users Group March 19, 2013

PG&E Pipeline Safety Enhancement Program (PSEP) Review Northern California Pipe Users Group March 19, 2013

PG&E s Gas Transmission System Key Statistics: ~ 5,800 miles of gas transmission i pipeline (as defined by U.S. Department of Transportation) ~ 6,750 miles of pipeline > 60 psig ~ 42,000 miles of gas distribution ib ti pipe 4.3 million natural gas customer accounts Deliver 970 BCF/year (2.6 BCF/daily average) 67% of PG&E s system was installed prior to 1970 30% of the pipeline miles are within Class 3 and 4 areas 43% of pipelines are great than 20 in diameter 67% of pipeline operate at greater than 30% SMYS at MOP PG&E Privileged and Confidential 2

Transforming Our Gas Business PG&E is committed to creating a stronger culture of public safety and has already begun implementing fundamental changes to our gas operations and management to do just that. PG&E is committed to earning back public trust and confidence by delivering on the commitments we have made. The Pipeline Safety Enhancement Plan (PSEP) is PG&E s filed plan to make these improvements. PG&E Privileged and Confidential 3

Why PSEP? Following the San Bruno Incident on Sep 9, 2010, the CPUC issued a decision on June 9, 2011 Requiring all California gas transmission operators to develop a plan to strength test or replace all gas transmission pipelines that do not have complete records of a prior test conducted to modern standards, and Directing the gas utilities to address the expanded d use of inline inspection tools and automatic gas shutoff valves. PG&E filed the Pipeline Safety Enhancement Plan (PSEP) in response to CPUC s Decision (D) 11-06-017 on Aug 26, 2011 PG&E Privileged and Confidential 4

PSEP Summary The PSEP contains two phases: Phase 1: 2011-2014 Phase 2: Begins in 2015 Phase 2 work targets pipeline segments that have been previously strength tested or are in rural areas. The work included in PSEP is in addition to existing pipeline replacement and maintenance, risk mitigation, and integrity management programs underway PG&E Privileged and Confidential 5

The major workstreams: 1.Pipeline Replacement: Replace 186 miles of pipeline 2.Hydro-test: strength test 783 miles, PSEP Plan for the Next Four Years 3.In-line-inspection: retrofit 199 miles to accommodate in-line inspections, and in-line inspect 234 miles. * targeting pipeline segments that are in highly populated urban areas, have vintage seam welds, or have not been strength tested. 4.Valve Automation: Install 228 automated valves in urban and active fault crossing areas 5.Pipeline Records Integration: Collect and verify all pipeline strength test and pipeline features data to calculate the maximum allowable operating pressure (MAOP) of all our pipelines and all associated components; 6.Interim Safety Enhancement Measures: Enhance the safety margin of our pipelines prior to testing and replacing them, by continuing to validate the MAOP for all gas transmission pipelines in the system, reducing gas pipeline pressure in certain areas, and significantly increasing the frequency of patrols and leak surveys. PG&E Privileged and Confidential 6

Pipeline Right-of-Way Program Comprehensive Pipeline Survey This year, PG&E is conducting a comprehensive survey of our 6,750-mile natural gas transmission pipeline system High-precision GPS mapping technology Visiting all properties where the pipeline runs Including: urban, rural, residential, commercial, agricultural and orchard areas, as well as public spaces Notifying i customers in advance of property visits it Brief property visits (approx. 15 mins.) include: Locating the underground pipeline using hand- held detection device Mapping the pipeline s precise coordinates Placing above-ground pipeline markers for future reference Checking the area above the pipeline for any structures or certain vegetation PG&E Privileged and Confidential 7

Restoration above the Pipeline Rights-of-way (land above the pipe) are established by recorded easement agreements Easement agreements create a shared responsibility between PG&E and property owners to maintain the area above the pipe Items such as sheds, gazebos, trees, or shrubs can interfere with our ability to maintain, inspect and safely operate the pipeline We will work cooperatively with property owners to remove and, if possible, relocate or replace these items Under this program, PG&E and its shareholders will pay to remove the items and provide reasonable replacements Long-term public education and awareness program Customer with shed and trees within right-of-way area PG&E Privileged and Confidential 8

Detailed Hydro-Test Plan 1 2 3 4 5 Hydrotesting 783 miles of pipeline are planned for hydrostatic testing (including verified records) in PSEP Phase-1 Strength Testing Schedule: 2011: 163 miles* 2012: 200 miles* 2013: 204 miles 2014: 158 miles 6 7 8 PG&E Privileged and Confidential 9

Hydrostatic Testing Process Time required to plan and conduct a Hydrostatic Test varies depending 1 on engineering complexity and permitting requirements 23-8 wks 3-16 wks PERMITS & CUSTOMER ENGINEERING 3 OUTREACH 4-6 wks 3 wks MOBILIZATION TEST & TIE-IN 4 5 Blowdown Gas 6 Weld-on Pig Launcher Weld-on Test Heads TEST PIPE Remove Test Heads Tie-In Pipe 7 Cut & Cap Clean Pipe Fill Pipe with Water Dewater Pipe Dry Pipe Pipeline Out of Service PG&E Privileged and Confidential 10

Overview of Outreach Activities Before Hydrostatic Testing Outreach to local authorities 1 Well before any activity occurs at a test segment, PG&E reaches out to local authorities to notify them of the planned activities and to begin the process of applying ppy for permits and appropriate 2 environmental clearances This outreach activity includes local governments as well as first responders Outreach 3 to customers Prior to equipment being mobilized at a site, customers in the vicinity of PG&E work and the pipeline 4 segment are sent a letter with information about the work to be done, the impacted areas and anticipated time frame, a fact sheet about hydrostatic testing and instructions on how to obtain further information 5 Outreach to communities At the 6 time equipment is mobilized, PG&E conducts open houses in the affected communities to provide a forum in which interested parties may learn more about gas safety and operations work under way and hydrostatic testing in particular, as well as being able to have 7 their concerns and questions addressed directly by PG&E representatives Outreach to media 8 At the time testing begins for a particular segment of transmission pipeline, media are notified via a press release PG&E Privileged and Confidential 11

Hydro-Testing Customer Outreach Timeline 1 2 Two Weeks Prior to Mobilization Pre-test letters are mailed to customers 3 One Week Prior to Mobilization Sensitive customer outreach 4 One Day Prior to Venting IVR calls are made One Day Prior to Hydro Test IVR calls are made Between Mobilization and Venting Local Open House event takes place One Day Prior to Tie In Purge IVR calls are made Line Tie In Completed Post-test letters are mailed to customers 5 Pre-Mobilization 6 Mobilization Venting Hydrostatic Test Tie In 7 Between Venting and Testing Canvass test area 8 PG&E Privileged and Confidential 12

Hydrostatic Testing Step 1: Take the existing pipe out of service and remove a section from each end of the segment to be tested. Cut and remove section Cut and remove section Existing Pipeline to be Tested PG&E Privileged and Confidential 13

Hydrostatic Testing Procedure Set tanks, dig test head holes and build test loop 1 2 3 4 5 6 7 PG&E Privileged and Confidential 14

Hydrostatic Testing Step 2: Weld on the two test heads, one with the pig installed. Segment of Pipe to be Tested Pig PG&E Privileged and Confidential 15

Hydrostatic Testing Step 3: Push the pig through the test segment with air to remove the residual oil inside the pipe pp and to clean the test segment. Inject air Pig Remove Residual Oil PG&E Privileged and Confidential 16

Hydrostatic Testing Procedure Install pig launcher and clean up 1 2 3 4 5 6 7 PG&E Privileged and Confidential 17

Hydrostatic Testing Step 4: Fill the test segment with water. Air Pig Water PG&E Privileged and Confidential 18

Hydrostatic Testing Procedure Install test heads and fill pipe with water 1 2 3 4 5 6 7 8 PG&E Privileged and Confidential 19

Hydrostatic Testing Step 5: Pressurize the segment with water to the desired test pressure and hold that pressure for the duration of the test. Pressure Recording Gauge Pig Test Segment Full of Water High Pressure Water PG&E Privileged and Confidential 20

Hydrostatic Testing Procedure Conduct Test, Dewater pipe into tanks and dry pipeline with compressed air 1 2 3 4 5 6 7 8 PG&E Privileged and Confidential 21

Hydrostatic Testing Step 6: After the test is completed, push the pig through the test segment with air to remove the water. Inject air Pig Remove Water PG&E Privileged and Confidential 22

Hydrostatic Testing Step 7: Push the pig the other direction to remove any residual water and dry the test segment. Air Pig Air PG&E Privileged and Confidential 23

Hydrostatic Testing Step 8: Cut and remove the two test heads, with the pig. Pig Tested Segment of Pipe PG&E Privileged and Confidential 24

Hydrostatic Testing Step 9: Tie in the newly tested segment back into the existing pipeline. Step 10: Return pipeline to service, testing completed. Tie in piece Tie in piece Existing Pipeline Tested Segment of Pipe Existing Pipeline PG&E Privileged and Confidential 25

Detailed Valve Replacement and Auto Plan In 2012 Automate, Install / Replace, or upgrade 46 valves New Remote Terminal Unit (RTU) Installations Pipelines L-101 L-109 L-132 L-132B L-147 Plan by Year 2011 29 valves 2012 46 valves 2013 90 valves DFM-0210-01 2014 63 valvesves L-300A L-300B Phase 1 228 PG&E Privileged and Confidential 26

Detailed Pipeline Replacement Plan Plan by Year 1 2011 0 3 miles 0.3 2012 39 miles 2013 64 miles 2014 82 miles Total 186 2 3 4 5 6 7 8 PG&E Privileged and Confidential 27

Detailed In-Line Inspection Plan 1 2 3 4 5 ILI Plan Inspections (Miles) ILI Upgrades (Miles) 2011 0 0 78 0 miles 2012 2013 121 78 2014 0 156 199 234 Phase 1 6 7 8 PG&E Privileged and Confidential 28

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Questions? 1 2 3 4 5 6 7 8 PG&E Privileged and Confidential 30