2004 APPA National Conference

1. Customer Oriented ReliabilityChristopher G. Bieber, P. Eng.Vice President, EngineeringMemphis Light, Gas & Water Division220 South Main StreetMemphis, TN 38101901 528 4692 2004 APPA National Conference June 22, 2004

2. Acknowledgments • Cliff DeBerry, PE. Manager, Electric Engineering • Tom Wyatt, PE. Supervisor, Reliability & Power Quality • Don Roberts, Design Engineer, Reliability & Power Quality • Xavier Davis, Design Engineer, Reliability & Power Quality See also Customer-Oriented Reliability Transmission & Distribution WorldDec 2003 Don Roberts and Xavier Davis

3. Our Vision To be the best utility in America for Memphis. Our Values • Leadership • Service • Customers • Community • Prosperity

4. Traditional Reliability Indexes • CAIDI = Sum of all the outage hours experienced by Customers per year / # of Customers who had an outage • ie. Average duration of an outage if you had one • SAIFI = Total of all the outages experienced by Customers per year / # of Customers • ie. # of outages per year per connected Customer • SAIDI = Sum of all the outage hours experienced by Customers per year / # of Customers • ie. Hours of outage per year per connected Customer Note: an outage has to be > 5 minutes long to count (IEEE definition)

5. M L G W’s Reliability Performance

6. Traditional Reliability Indexes Are • Good for • Utility performance comparisons, • Managing reliability at a “macro” level • Not so good for • Understanding Customer’s demands • Managing reliability at a “micro” level • Communicating with Customers & Employees

7. Reliability performance as determined by survey

8. Reliability performance as determined by survey

9. Reliability Performance

10. Reliability survey conclusions • Survey responses were independent of actual outage history, • The season appeared to be the biggest determinant of Customers perceptions of reliability, • Summer appeared to have the greatest variance between demand and performance, • Summer is storm season, Reliability surveys are not very helpful.

11. What Reliability Do Customers Demand “Your most unhappy customers are your greatest source of learning.” -Bill Gates

12. 5 Customers with 19 Outages 2 Customers with 17 Outages

13. Analyzed Three Years of Customer Reliability Inquiries • Over 600 Inquiries about Outage Frequency • Over 250 Inquiries about Outage Duration • Inquiries and letters to media during Hurricane Elvis

16. Customer Oriented Reliability • Normal Operations – analysis shows • Prevent Customers from Experiencing Over 3 Interruptions Per Year • Prevent Outage Events • Over 10 Hours in Duration • Major Storms – data suggests • Prevent Outage Events Over 5 days in Duration

17. So What? Organizational focus that everyone can understand!

18. Reliability Performance Targets

19. Reliability Performance

20. Reliability Performance

21. CARESComputer Aided Restoration of Electric System

23. Outage Management • Outage planning, 1 outage vs >1 outage • No more circumvention of planned outage notification process by keeping outages < 2 hours • Outage review • when a Customers gets to 2 outages • outages > 10 hours • Fix it right the first time if possible in <10 hours vs temporary repairs

24. Outage > 10 hour Reviews

25. Equipment Failure Reviews – 5 Whys MLGW Significant Event Report Significant Event Report (SER) # E- 1 Date of Event -8/20/02 Description of Event What Happened; Cable fault on tie line between Substation 45 and Sta. 3 and GE oil breaker at Sta. 3 failed to open, resulting in outage to downtown customers. Root Cause Analysis (See http://www.insightshare.com/login/Knowledge_Base/tools/whys.html for guidance on how to do Root Cause Analysis using the 5 Whys) Why 1; Why did GE oil breaker at Sta. 3 fail to open? Trip bearing mechanism inside GE breaker was seized. Why 2; Why were the trip bearings mechanism seized? The lubricating grease on the mechanism had hardened. Why 3; Why was the grease hardened? Lubrication of the GE breaker mechanism was missed when the three year preventive maintenance of breaker occurred on February 18, 2002. Why 4; Why was lubrication of the GE breaker mechanism missed? Checklist on Power Circuit Breaker Inspection Record form #13227 was not filled out properly. Why 5; Why was checklist not filled out properly? Checklist form for lubricating GE oil breaker mechanism does not differentiate in type of breaker being worked on. Corrective Action Plan What By Who By When Place oil breaker type and brand on checklist form #13227 to remind that GE breakers require lubricating. Roy Harvey 9/20/02 Evaluate past breaker maintenances to examine that front-end task of lubrication on GE breakers and some Westinghouse have performed correctly. Roy Harvey11/15/02

26. Storm Management - EMERGENCY SEVERITY LEVELS

27. Electric System - Reducing Outage Frequency • Drive reliability work requests to the top of the priority list and follow up to ensure needed work gets done, • Customize cycle tree trimming to reflect neighborhood tree characteristics, 3,4 or 5 year cycle, • Supplement PE cable replacement with cable treatment • Target • Animal proofing • Redesign & retrofit • Line inspection & corrective maintenance to reflect reliability performance rather than geographic grids.

28. Electric System - Reducing Outage Duration • Identified common causes for > 10 hour outages • Cable faults after hours • Vehicles hitting poles after hours • Call in additional experienced personnel when event occurs rather than wait. • Focus on susceptible poles • Erring on the safe side with storm watches • Distribution Automation evaluation

29. Electric System - Reducing Major Storm Outage Duration • Upgrade critical circuits supplying hospitals, water (both well & station pumps) & waste water treatment facilities, • Underground high risk portions of major circuits, • Install reclosures, sectionalizers and fuses at strategic locations, • Improve funding for preventive capital & maintenance programs, • Upgrade defective wooden structures.

30. Customer Inquiries per Quarter (1999 – 2004)

31. Conclusion • The industry traditional measures of reliability, SAIDI, CAIDI & SAIFI need to be supplemented with Customer specific measures in order to minimize Customer complaints about reliability, • For MLGW, the data shows that keeping outage durations below 10 hours and outage frequency at no more than 3 outages per year to any Customer should minimize Customer complaints, and • It is too soon to know if the changes that MLGW has made in managing outages has reduced the number of Customer complaints, however the results to date are encouraging.