AGA Operations Conference A Status Report on Gas Safety Progress at PG&E Sumeet Singh Jim Howe May 20, 2015 AGA Operations Conference

Company Background Incorporated in California in 1905 One of the largest combined natural gas and electric utilities in the United States Serves approximately 15 million people throughout a 70,000- square-mile service area Redding PG&E Service Territory ~ 5,800 miles of DOT classified gas transmission pipeline1 ~ 42,000 miles of gas distribution pipeline 4.3 million natural gas customer accounts Deliver 970 BCF/year San Francisco Bakersfield ~6,800 miles based on criteria using greater than 60 psig operating pressure 2

Gas Safety Excellence Safety Management System The way we do safety Risk Based Decisions Layers of Protection “Be the safest, most reliable gas company in the nation” 3

Do the right work in the right way Do Say Ratio equal to One Safety Culture Do the right work in the right way Find it, Fix it Stop work Authority Do Say Ratio equal to One Strategic Actions PG&E’s focus is to create a culture based on trust where employees feel comfortable speaking up, stopping jobs, sharing incidents or near hits and learning from one another - without discipline or fear or reprisal Leadership is critical and leaders must be equipped to lead safety culture change Corrective Action Program is “foundational” 4

Asset Management Understanding our Assets 5

Asset Management Risk Process and Planning Apply risk-based prioritization and constraints across Asset Families Transmission Pipe Risk Management Process and Planning Storage Compression & Processing Measurement & Control Distribution Mains and Services1 Risk-Based Proposal of Storage Mitigating Programs Identify threats and assess risks by Asset Family Develop proposed mitigation programs within Asset Families Develop executable Investment Plan Risk-based, executable Investment Plan incorporating all Asset Families Incorporate new and changing information Analyze Key Risks (Session D) Develop Strategic Plan (Session 1) Develop Execution Plan (Session 2) LNG/CNG Customer Connected Equipment (1) Distribution Mains and Services are two distinct Asset Families Risk-Based Proposal of Mitigating Programs by Asset Family 6

Process Safety Process safety is about reducing the possibility of low frequency, high consequence incidents Identify Anticipate and understand potential hazards Evaluate Consequences Safeguards Risks Add layers of protection to prevent and/or mitigate incidents Layers of Protection Of Employees Of Public Of Environment Of Assets PG&E is focused on embedding process safety principles to ensure safe management of assets across their entire life cycle including design and engineering of facilities, maintenance of equipment, effective control points and procedures and training. 7

Our Progress 2010 2014 33.3 19.9 94.4% 99.50% 27 65 12,203 120 755 29 16%5 98% 7745 17 1 Data represents year-to-date average 3 Data represents for specific year 4 Data represents total remaining at year-end 5 Data as of 2011 8

Our Progress - Accomplishments Replaced 127 miles of Transmission Pipeline Increased pipeline piggability to 26% Automated 208 valves Reduced Dig-in rate to 2.42 2nd Quartile Hydro-tested 674 miles of pipeline to establish MAOP Replacement of all known cast iron pipes Digitized and reviewed nearly 4 million records to validate MAOP for every pipeline component of the 6,750 mile gas transmission system Enhanced Pipeline Centerline Accuracy to within 10 ft. 9

Our Progress Changes in Gas Operations Organizational Alignment T&D Control Center SCADA & System Visibility Rate Case Structure Gas Safety Plan Continued Focus for Gas Operations Leak Survey - Picarro Emergency Preparedness and Response Damage Prevention Compliance / Regulatory Commitments Community Outreach Research and Development Gas Operations Training Center 10

When it comes to safety, our work is never done! Conclusion We are constantly evaluating our processes for continuous improvement opportunities When it comes to safety, our work is never done! 11