Quality Initiatives at South Jersey Gas

1. Quality Initiatives at South Jersey Gas February 2013

2. About South Jersey Gas • Approximately 354,000 customers • Serves 7 southern counties of NJ

3. How Do You Define Quality • How do you define Quality? • Working Safely • Adding value to the Customer • Conformance with Standards & Regulatory Requirements • Eliminating wasteful steps • SJG has adopted all of the Above

4. Our Quality Efforts Relate to Our Business Plan South Jersey Gas Company Key Drivers include: • Employee & Public safety • Employee & Contractor Qualifications • Infrastructure Replacement • Customer Growth & Conversions

5. LEAN/Six Sigma at SJG • Damage Prevention – supports employee & public safety – resulted in corrective actions and new process review team to conduct root cause analysis on our most severe damages. • Contractor Management – supports infrastructure replacement construction activities - work in progress • New Business Cycle Time – supports customer growth – additional 2013 quality initiative

6. LEAN/Six Sigma • Helped us to focus on managing a process and not letting an event manage us • Encouraged better communication and leveraging of resources across departmental lines via cross functional teams • Helped us to identify the real customer in any process – If something goes wrong, who is most impacted (screams the loudest)? • A good facilitator can make the difference

7. The Three Actuals • Go to the actual place where the work happens • Talk to the people who actually perform the work • Map the process as it actually happens then let the customer pull the process (drive improvements)

8. Six Sigma & Damage Prevention • Damage Ratio – Lowered rate by 8% from 2011 • Electric Company damages down 53% from 2011 • Our vendor’s at fault damages down 19% from 2011 – • Mark Out Quality Control audits – SJG employees audit our contractor - “Squid Eye” 24” 0” 18” 24”

9. Quality Audits of our Mark Out Vendor • Random selection of mark out tickets • SJG crews verify accuracy of the mark out • Immediate corrective action is taken • Bad locators are removed from our system

10. Damage Prevention Plan • Implement corrective actions • Process review of severe damages • Municipalities put on notice to hold their contractors accountable • High Risk & Cross Bore procedures implemented • Three project employees now in place to “Prairie Dog” contractors - Best Practice • Contractor Meetings/Breakfasts related to damage prevention

11. Safety & Quality • Pre-job safety meetings • Overheated Boiler Alert to employees & HVAC contractors in our territory • Near Miss Process • Ergonomic Analysis • New Safety Recognition Program – Leading Indicators

12. Celebrate Success but Don’t Stop Improving • Recipients of AGA Driver Safety Award • Recipients of NGA H&S Award Looking forward: • Continue efforts to build a culture which values safety as the most important priority • Implement programs to reduce the risks associated with high risk job tasks e.g. working around underground electric + ergonomic focus

13. Quality & Training /Qualifications • Implemented strict Contractor Qualification Process • Completed inventory of training for our employees & approval for training resources • Adopt NGA OQ process & 48 hour rule for retesting • GEOP & ICS - Preparation pays off – GEOP drill • Building a pipeline of qualified applicants • Training Center Planned Enhancements – better facility – better tools – better work stations

14. Training & Qualifications • Audit Contractor Training • Provided IFGC training to inspectors • Important to recognize deficiencies. Relating to moving meters inside to outside, Construction Inspectors could not hold contractors accountable to conform to standards until they were trained.

15. Customer Growth & Conversions • It takes a village to raise a child • It takes a company to add a customer! • Listening to customers is critical and was a key lesson from our LEAN/Six Sigma Team • Are you a good listener? Quiz • Customer Metrics - If you don’t measure it, you will not improve it!

16. The Stats Percentage of Calls Answered in 30 seconds Average Speed of Answer Call Abandon Rate First Call Resolution

17. Good News Tuesday • Share good news • Customer Compliments • Exercise • Certified Language interpreters • Assists Customer Service Reps in the handling of foreign speaking customer calls

18. Customer Service Training • New Hire Training & Hiring of a Quality Supervisor • Customer Service Training by ACC

19. Insert Video • Insert video training comic relief – Joan & Vince

20. Technology & Quality Improvement • EWAMS - our new work management system will drive process improvements: • Materials Management – Materials list for each work order – part of our current six sigma effort. Getting Materials to the jobsite on time. • Traceability – will allow us to identify and track all facilities installed. • Facilitates new QA/QC program - installing services – upload photos to work order and audit to 95% confidence level – criteria to include depth, tracer wire connections, clearance, spot holes, meter set, warning tape, tee connection to main w/EFV, final restoration. • Will eventually help us to create a smart data base for analyzing contractor inspections

21. Additional 2013 Quality Initiatives • QA/QC for leak surveyors via GPS download • LEAN/Six Sigma Contractor Management Team • New Six Sigma Team – New Business Cycle time

22. Additional 2013 Quality Initiatives • Traceability -Perform a feasibility analysis and prepare a recommendation for the implementation of a traceability system (beyond current process) • Best Practices - Actively participate in the AGA Best Practices and PSE&G Peer Panel efforts in 2013 to assist in establishing areas for 2014 process improvement initiatives • Identify additional areas for improvement by means of surveying business leaders

23. Questions