New Service Delivery Presented by Milton Russell

1. New Service DeliveryPresented by Milton Russell

2. New Service Delivery Scope Team Members Training Methodology Project Start Date May 25, 2005

3. New Service Delivery Scope Beginning: Customer (builder, developer, home and commercial owner, contractor, etc…) contacts CPS Energy for new service (electric and/or gas service). Ending: Customer receives CPS Energy services through gas/electric meter.

4. New Service Delivery Scope (cont.) Included in Scope: • Distribution system electric and/or gas only • Residential subdivisions Overhead (OH) and Underground Residential Distribution (URD) • Residential single family/multi-family dwellings, • Commercial developments OH and Underground (UG) • Mobile home lots • Streetlights installed as part of residential subdivisions. Not included in Scope: • Customers with existing services from CPS Energy • Civic and System improvement projects • Overhead to underground conversions • Transmission projects • Downtown network projects • Maintenance and Repair of existing infrastructure

5. Team Members • Julius Moore – Team Leader • Years: 10 • Area: Transmission Planning/Underground Engineering • Duane Dugie • Years: 29 • Area: Customer Coordination/ EDS East • Mark Barth • Years: 34 • Area: Large Commercial Planning • Hubert Friesenhahn • Years: 24 • Area: Underground Cable Splicer/EDS East • Floyd Haman: • Years: 23 • Area: Underground Electric Distribution (UED)/EDS West • Charlie Martinez • Years: 28 • Area: Overhead Construction/EDS West

6. Team Members (cont) • Jeanine LaRocque • Years: 23 • Area: Administration/EDS East • Karrie Satcher • Years: 5 • Area: Purchasing/Contract Services • Steve Blain • Years: 10 • Area: Subdivision Planning • Curt Alexander • Years: 13 • Area: Gas Marketing • Milton Russell • Years: 14 • Area: Underground/EDS East

7. Team Members (cont) • John Harnsberry • Years: 1 • Background: HR and Training • Note: recruited from outside of CPS Energy • Glenn Frerich • Years: 28 • Area: Underground Energy Distribution • Note: Glenn replaced Floyd Haman in March 2007 TOTAL YEARS OF EXPERIENCE ON THE TEAM: 243 Years

8. The NSDR Team received the following Training • Work Style Inventory • Myers-Briggs Type Indicator (MBTI) • Accelerated Process Improvement • Guiding Team Performance • Influencing Without Authority • Business Process Reengineering • The New Leadership • Change Management • Process Design & Implementation • Essential Facilitation • Fish Training • Give’em the Pickle • The Leadership Pickles • The Fred Factor • 11th Annual Lean Management Conference

9. NSD Redesign Approach

10. Key Activities Timeline • Current State Assessment – November 2005 • Conceptual Solution Design – December 2005 • Business Case approved - March 2006 • Design NSD Facility – July 2006 • Detailed Solution Development – December 2006 • Web Portal • Job Status Display Screen • Front Lot Construction standard change • Developer responsible for all utility coordination • Employee Selection for Pilot • WMIS Task Structure Changes • NSD Pilot Training - November 2006 to January 2007 • NSD Pilot – March 2007 to September 2007 • Implementation– October 2007 and beyond

13. NSD Pilot Details

14. Front Lot Construction Advantages • Cost Savings utilizing front lot • Reduce time frame of construction • Shorter service length • Easier access for Transformer • Simplified and Streamlined platting process • Reduces the amount of service re-routes

15. Front Lot Construction (cont) Advantages • Use fewer, but larger Capacity transformers (Not Physical Size) • Reduces conflict with other construction • Improves Aesthetics • Transformer Study • Eliminates the need for future alleyway repairs that occur with rear lot construction • Supports tree preservation ordinance • Fewer trees destroyed or disturbed • Transformer Shared across two property Lines

16. Front Lot Construction (cont) Advantages • Reduced outage time to customer • Crews do not disturb customer during outages • Customer can see crews working • Less cost for future encroachment • Removes encumbrance of customer’s backyards • Transformer shared across two property lines where applicable

17. Developer Installed Infrastructure The Process • The Developer’s contractor that installs sewer and water can also trench and install the infrastructure conduit for electric and gas*. • The Developer’s engineer is now the Joint trench coordinator for all utilities. (AT&T, Time Warner, Grande Communication, Guadalupe Valley) * If on CPS Energy’s approved contractor list.

18. Developer Installed Infrastructure (cont) Advantages to Developer • Decreased time between the installation of wet and dry utilities. • Developer controls their timeline up to the point of pulling cable and setting transformers.

19. Developer Installed Infrastructure (cont) Advantages to CPS Energy • Now we are focusing on CPS Energy’s core business; energy delivery • No longer acts as the project manager for the Developer. That responsibility is now with the Developer’s engineer. • No longer responsible for coordinating pre-construction meetings.

20. All-in-One Meter Main Advantages to the Developer and/or CPS Energy • Safety • Eliminates temporary meter pole • Eliminates conduit and cable running across yards and streets • No exposed service entrance conductors • Reduced customer complaints on Temporary Meter Loop removal (TML) • Reduced Timeline • One trip at the beginning of project • Should cut construction time for developers due to availability of power • Eliminate coordination to install and remove temporary meter loop

21. All-in-One Meter Main (cont) Advantages to the Developer and/or CPS Energy • Cost Savings • Expedites service installation • Reduces Builder’s cost • Less permits • Cost of permanent vs. temporary to final equipment cost • Reduce number of turn downs due to poor construction • Initiating 1 work order vs. the potential of 4 • 1 piece Module Meter

22. Additional Initiatives • Elimination of supplying all self-contained single phase meter cans • Correcting and Standardizing CAM units to reflect the appropriate material (prerequisite to VMI) • Empowering our construction crews to participate in decision making regarding the reduction of trips to the jobsite • Right-sizing transformers • Integrated Supply/Vendor Managed Inventory

23. Questions?