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Safety Strategy
Atmos Energy Corporation
Fiscal 2017
Focused on investing in:
System Safety
Replacing higher risk pipe materials and equipment
Replacing steel service lines
Enhancing pipeline integrity assessments
Underground storage integrity
New technology
Public Safety
Emergency response
Customer & community education
Public awareness
Employee Safety
State-of-the-art training
Tools and equipment
Eliminate at-risk behavior
Incident free
Safety Vision
Our Vision is to be the Safest Provider of Natural Gas Services
1
As of Year End September 30, 2017
Landscape
2
National focus on pipeline safety and storage
operations
State and local agencies understand the need
to replace aging infrastructure
Regulators supportive in the jurisdictions we
serve
Access to capital to make prudent investments
Positive long-term outlook for gas supply and
pricing
Pipeline safety and storage regulations
continue to evolve
As of Year End September 30, 2017
3
Reducing Risk & Enhancing Ability to Scale
AGA Peer to Peer Review
Charter member of program
2017 review included damage prevention and quality
management
Employee & Contractor OQ Badges
Ability to scan at job site using mobile apps for contractors
and Atmos Energy employees
Line Locating Sourcing
Enterprise process for line locating services
QA/QC and audit reporting
Pipeline Record Verification and Scanning
Standardized document scanning & storage
QA/QC and audit reporting
Contractor OQ Badge
Process and Continuous Improvement
As of Year End September 30, 2017
4
PHMSA issued Interim Final Rule (IFR)
December 2016
Implementing industry recommended
practices
Executing on our risk reduction and
mitigation plans
Proactive well monitoring
Inventory verification analysis
Scheduled mechanical integrity
Well-control, emergency response plan
Periodically conduct tabletop exercises for
emergency preparedness and response
Reducing Risk & Enhancing Ability to Scale
Underground Storage Integrity Management
As of Year End September 30, 2017
5
Asset Data Collection
Innovative Leak Detection
Wireless Meter Reading
Wireless Cathodic Protection Monitoring
Reducing Risk & Enhancing Ability to Scale
New Technology Deployment
As of Year End September 30, 2017
6
Capital Spending Mix
Safety & Reliability Investments Enable Modernization of Infrastructure
$ millions FISCAL 2017 CAPEX
$ 473 Repair and replace transmission and distribution pipelines
$ 129 Fortification
$ 118 Service line replacement
$ 97 Install and replace measurement & regulating equipment
$ 53 Enhance storage and compression capabilities
$ 44 Pipeline integrity management projects
$ 914 Total Safety and Reliability Spending
$ 1,137 Total Capital Spending
80%
13%
7%
Safety and Reliability
Customer Expansion
Other
As of Year End September 30, 2017
Distribution System
2,213
13,108
1,631
5,873
6,166
8,817
9,612
10,253
7,130
4,799Unknown
Pre-40's
40's
50's
60's
70's
80's
90's
00's
10's
~ 70,000 Total Miles of Distribution Main
~ 42% Installed Pre-1970
Comprehensive Pipe Replacement
Program Risk Assessment Factors
Include:
Legacy construction practices
Material type
Leak history
Age
Location
Soil type
Miles of Pipe by Decade of Installation
Source: 2016 DOT Report
7
As of Year End September 30, 2017
Risk-Based Replacements - Distribution
Inventory of Pre-1970 Materials
7,300 6,100 4,000-4,200
23,500
22,500
20,000-22,000
0
5,000
10,000
15,000
20,000
25,000
30,000
2012 2017 2022E
Inve
nto
ry M
iles
8
Industry Identified
Materials – Bare Steel,
Cast Iron, Vintage
Plastics
Other Risk-Based
Materials
30,800
28,600
24,000-26,000
Inventory of Industry
Identified Materials
4,900 Miles
Bare Steel
700 Miles
Vintage Plastic
500 Miles
Cast Iron
8
As of Year End September 30, 2017
Distribution Miles
374
~ 600-700 miles
annually
470
9
Pipe Replacement Mileage
Estimated Miles Replaced by Fiscal Year - An Ongoing Commitment
Transmission Miles
0
25
50
75
100
125
150
175
2012 2013 2014 2015 2016 2017 2018E-
2022E
105
96
~ 175-225 miles
annually
9
Industry Identified
Materials – Bare Steel,
Cast Iron, Vintage
Plastics
Other Risk-Based
Materials
346
295
5050
470
103
496 144
0
100
200
300
400
500
600
2012 2013 2014 2015 2016 2017 2018E-
2022E
As of Year End September 30, 2017
Focused Steel Service Lines Replacement
Replacing ~ 40,000 Steel Service Lines Annually
10
0
200
400
600
800
1,000
1,200
2012 2017 2022E
1,167
970
~750-800
Th
ou
sa
nd
s
New service lines use state of
the art material, construction
and joining practices
Service lines are in close
proximity to customer
residence and business
locations
Approximately 70% of leaks
occur on service lines
Inventory of Steel Service Lines10
As of Year End September 30, 2017
11
Employee Safety
Charles K Vaughan Training Center
Technical & Safety Training – Flow Lab and Gas City
State-of-the-art facility
Comprehensive training Meter reading
Service
Construction
Measurement
Corrosion
Emergency responder
Approximately 300-400 employees new to
their jobs each year
Between 1,000 – 2,000 employees
enrolled in refresher courses annually
As of Year End September 30, 2017
12
Reducing Risk
Significant progress over last 6 years
Employee-driven safety culture
Focus on reducing or mitigating risk
Managing leak inventories through a
combination of infrastructure
replacement and leak management
programs
Measuring safety performance with
Atmos Energy expectations and
values
Active leaks
Excavation
Damage Rate
Employee
Injuries
18%
24%
2012 - 2017
6%
Improved Safety Performance
As of Year End September 30, 2017
13
In Summary
Executing on our strategy to become the safest provider
Significant prudent investment opportunity in our infrastructure and people
Partnering with regulators and communities
Leveraging new technology and business processes
Benefiting customers, communities, employees and investors
Well Aligned with Stakeholders
As of Year End September 30, 2017