sce 2018 grc · sce 2018 grc safety & risk workshop november 2, 2016. 10:00 – 12:00pm . paul...

SCE 2018 GRC Safety & Risk WorkshopNovember 2, 201610:00 – 12:00pm Paul Jeske, Amir Angha, Robert Woods

Hearing Room E 505 Van Ness Avenue San Francisco, CA 94102

1

Agenda

Topic Presenter Time

Safety in SCE’s 2018 GRC Paul Jeske 10:00 – 10:30

Risk-Informed Planning in SCE’s 2018 GRC Amir Angha 10:30 – 11:00

SCE’s Overhead Conductor Program: An example of risk-informed decision making in SCE’s 2018 GRC

Robert Woods 11:00 – 12:00

2

Safety in SCE’s 2018 GRCPaul Jeske

3

Agenda

• Public Safety

• Employee Safety

• Contractor Safety

4

Public Safety Programs

Communication and Outreach Operational Activities

Consumer education about electrical hazards

External worker safety

Schoolchildren

Electric and Magnetic Fields

Other Outreach

Maintenance, Inspection & Infrastructure Replacement

Emergency Management

Dam Safety

Business Resiliency

Physical Security & Cybersecurity

We continue to develop and implement public safety strategies that guide our communication, outreach and operational activities

5

External assessment expert conducted an enterprise

safety assessment in 2014

Opportunities identified across leadership, org

structure, programs/systems and engagement

Leaders in the company developed an Enterprise

Safety Roadmap comprised of 20 initiatives

We used a systematic assessment process to identify opportunities in safety structure, leadership, engagement, programs and systems which informed the development of the Enterprise Safety Roadmap

Employee & Contractor Safety: Enterprise Safety Assessment and Roadmap Development

6

• Incident Management and Investigation

• Injury Management and Return to Work

• Safety Program Evaluation

• Best Practice Sharing

17

Employee & Contractor Safety: 2015 Enterprise Safety Roadmap

• Established safety governance, structure goals, metrics, roles and responsibilities across the enterprise

• Established and instilled safety leadership competencies• Empowered leaders to increase employee engagement in safety• Developed systems and processes to consistently manage safety across the enterprise

We implemented a Safety Governance structure to oversee Enterprise Safety and Roadmap execution

Governance Leadership Worker Engagement Safety Systems

• Safety Governance

• Communication Strategy

• Corporate Safety Goal

• Safety PDP Goals

• Safety Scorecard

• Safety Organization and Operating Model

• Executive Safety Engagement

• Safety Leadership Development

• Safety Staff Qualifications & Training

• Roles and Responsibilities (Leaders)

1

2

4

5

6

7

8

9

10

• Observation Program

• Congresses and Teams

• Recognition Program

• High Hazard Skills Training

• Safety Partnership with Union Leadership

• Contractor Safety Program

11

3

12

13

14

15

16

18

19

20

7

Employee & Contractor Safety: 2016 Enterprise Safety Roadmap

• Foster safety leadership competencies across the company

• Facilitate sustained employee engagement in safety

• Develop/improve systems and processes to consistently and effectively manage safety enterprise-wide

• Safety Leadership Development

• Executive Safety Skills

• Safety Roles & Responsibilities

• Health & Wellness

• Safety Observation Program

1

2

3

4

• Organizational Learning

• Contractor Safety Program

Leadership Worker Engagement Safety Systems

7

6

5

8

Safety Culture Assessment Q1 2017

Safety Programs and Systems

Leader and Worker Engagement

Organizational Learning

• Organizational Learning Framework

• Incident Cause Evaluations

• Predictive Analytics

• Public Safety

• Contractor Safety

• Office Safety

• Safety Engagement

• Safety Roles and Responsibilities

• Stop Work Responsibility

2017 Safety Focus: Public, Employee & Contractor Safety

9

Contractor Safety

2016 Activities 2017 Activities Overarching strategy and discrete initiatives to improvecontractor safety processes

• Contractor Safety Standard

• Third Party Administrator (TPA)

• Field Assessments

• Contractor Safety Roles and Responsibilities

• Contractor Safety Forums

• Cause Analysis

Fully implement improved contractor safety processesad programs

• Contractor Safety Standard

• Internal Training and Development

• Third Party Administrator (TPA)

• Contractor Quality Assurance Review (CQAR)

• Organizational Learning

10

Risk-Informed Planning in SCE’s 2018 GRCAmir Angha

11

Introduction

• Southern California Edison (SCE) provides extensive testimony on Risk-Informed Decision-Making in its 2018-2020 General Rate Case (GRC)

• This Workshop is intended to provide an overview of the Risk-Informed Decision-Making discussion in the GRC testimony

• Topics that are covered in our GRC:– Risk-informed decision-making approach

– Risk-informed decision-making process (progress and future state)

– Detailed risk analysis in select piloted areas

– Mapping of portions of GRC request to risk

12

Risk-Informed Decision-Making in SCE 2018 GRCRisk-Informed Decision-Making GRC Volume

SCE’s vision for risk-informed decision-making Policy Volume (SCE-01)

Risk-informed decision-making framework Enterprise Risk Management Program – Finance Volume (SCE-08, Vol. 03)

Demonstration of risk-informed decision-making pilot for transmission & distribution (T&D) operational risks

T&D Volume (SCE-02, Vol. 01)

Demonstration of risk-informed decision-making for Non-T&D pilots (in order of exhibits)

Customer Service – Implementation of a new customer relationship & billing system replatform (SCE-04 – Vol. 03)

Power Supply Hydro – Dam safety (SCE-05, Vol. 03)

Business Resiliency – Seismic evaluation & retrofit (SCE-07, Vol. 01)

Corporate Real Estate – Facilities upgrades (SCE-07, Vol. 03)

Corporate Security – Physical security of critical infrastructure (SCE-07, Vol. 05)

Mapping of important risk outcomes• To the GRC requests • To enterprise-level risks

• Policy Volume (SCE-01)• Enterprise Risk Management Program – Finance Volume

(SCE-08, Vol. 03)

13

SCE Approach to Risk-Informed Decision-Making

ENTERPRISE RISK

MANAGEMENT

STRATEGY & GOALS

FINANCIAL PLANNING & GOVERNANCE

ASSET & OPERATIONAL

RISK MANAGEMENT

BUSINESS RESILIENCY

RISK-INFORMED DECISION-MAKING

− Risk management has long been an implicit part of our decision making, but we are transitioning to a more explicit, integrated, and cohesive risk-informed decision-making model

• Structured framework to explicitly integrate risk consideration in decision-making

− An evolving process leveraging:• SED-coordinated SMAP workshops and Working Groups• Vigorous exchange of ideas amongst Commission staff, California utilities, intervenors,

and academic experts• Existing SCE processes to develop a new risk-informed decision-making framework

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Risk-Informed Decision-Making Process

(1) Risk Identification

(2) Risk Evaluation

(3) Risk Mitigation

Identification

(4) Risk Mitigation Evaluation

(5) Decision-Making & Planning

(6) Monitoring & Reporting

Safety Service Reliability Financial Environmental Compliance

Impact LevelThe potential impact of a risk event on public or worker safety

The potential impact of a risk event on service or grid reliability

The potential of a risk event resulting in a financial cost to shareholders, ratepayers and/or third

parties

The potential impact of a risk event on natural resources such as air, soil, water, plants or animal

life

The potential impact of a risk event resulting in a non-compliance with federal, state, local,

industrial, or operational standards or requirements

Catastrophic(7)

Many Fatalities, Mass Serious Injury or Illness: - Many fatalities of employees, public members or contractors; - Mass serious injuries or illness resulting in hospitalization, disability or loss of work; - Wide-spread illness caused typically caused by sustained exposure to agents.

Customer Hours Impact: - Outage resulting in greater then 20 million total customer hours of interruption.

Financial Costs: - Impact > $3 billion in costs; consider costs to shareholders, ratepayers and third parties.

Environmental Impact:- Resulting in Permanent or long-term damage greater than 100 years;- Irreversible and immediate damage to surrounding environment (e.g. extinction of species).

Non-Compliance Impact:- Actions resulting in potential closure, split or sale of Company.

Severe(6)

Few Fatalities, Serious Injury or Illness; Permanent Disability:- Few fatalities of employees, public members or contractors;- Many serious injuries or illnesses resulting in hospitalization, disability or loss of work;- Localized illness typically caused by acute or temporary exposure to agents.

Customer Hours Impact:- Outage resulting in at least 2 million total customer hours of interruption.

Financial Costs: - Impact between $300 million and $3 billion in costs; consider costs to shareholders, ratepayers, and third parties.

Environmental Impact: - Resulting in acute long-term damage greater than 10 years; - Severe damage to surrounding environment.

Non-Compliance Impact:- Regulator issued cease and desist orders;- Regulators force the shut down of critical assets.

Extensive(5)

Serious Injuries or Illness; Permanent Disability:- Serious injuries or illness to many employees, public members or contractors resulting in hospitalization, disability or loss of work.

Customer Hours Impact:- Outage resulting in at least 200,000 total customer hours of interruption.

Financial Costs: - Impact between $30 million and $300 million in costs; consider costs to shareholders, ratepayers, and third parties.

Environmental Impact:- Resulting in significant medium-term damage greater than 2 years; - Reversible damage to surrounding environment.

Non-Compliance Impact:- Regulatory investigations and enforcement actions, lasting longer than a year;- Violations that result in fines or penalties and/or multiple large non-financial sanctions;- Regulators force the removal and replacement of management positions.

Major(4)

Serious Injuries or Illness; Permanent Disability:- Serious injuries or illness to few employees, public members or contractors resulting in hospitalization, disability or loss of work;- Several employees, member of the public or contractors sent requiring treatment beyond first aid.



Environmental Impact:- Resulting in moderate medium-term damage greater than few months;- Reversible damage to surrounding environment.

Non-Compliance Impact:- Significant new and updated regulations are enacted as a result of an event;- Violations that result in fines or penalties and/or non-financial sanctions;- Increased oversight from regulators.

Moderate(3)

Minor Injuries or Illness: - Minor injuries or illness to several employees, public members or contractors; - Few employees, members of the public or contractors requiring treatment beyond first aid;


Financial Costs: - Impact between $300k and $3 million in costs; consider costs from shareholders, ratepayers, and third parties.

Environmental Impact:- Resulting in moderate short-term damage of few months;- Reversible damage to surrounding environment with no secondary consequences.

Non-Compliance Impact:- Violations that result in fines or penalties;- No additional oversight from regulators.

Minor(2)

Minor Injuries or Illness: - Minor injuries or illness to few employees, public members or contractors requiring first aid.

Customer Hours Impact: - Outage resulting in at least 200 total customer hours of interruption.

Financial Costs: - Impact between $30k and $300k in costs; consider costs to shareholders, ratepayers, and third parties.

Environmental Impact:- Resulting in short-term minor damage of less than few months;- Immediately correctable damage to surrounding environment.

Non-Compliance Impact:-Self-reported or regulator identified violations with no fines or penalties.

Negligible(1)

- No injury or illness. Customer Hours Impact:- Outage resulting in less than 200 total customer hours of interruption.

Financial Costs: - Impact of less than $30k in costs; consider costs to shareholders, ratepayers, and third parties.

Environmental Impact:- Resulting in negligible to no damage- Very small damage scale, if not negligible.

Non-Compliance Impact:- No compliance impact up to an administrative impact.

Risk Spend = /Efficiency

TrainingKey Risk Mitigation Plan Summary: 2016 Audit Committee

Confidential – Protected by Attorney/ Client Privilege and Work Product Risk Description

Risk Owner(s) Mitigated Risk Likelihood & Impact Key Risk Indicators Level Trend

Out

com

e

Severe

Moderate

Low

Low Medium High

Likelihood

Risk Committee(s)

KRI Level Trend since Previous Update: Higher Risk Lower Risk

Related Corporate Goal (2016)

15

Risk-Informed Decision-Making Process

(1) Risk Identification

(2) Risk Evaluation

(3) Risk Mitigation

Identification

(4) Risk Mitigation Evaluation

(5) Decision-Making & Planning

(6) Monitoring & Reporting

• Review existing risks• Survey/interview risk managers• Engage with Audit, Compliance, Business Resiliency• Compare to external benchmarking resources• Develop Bowtie 1 diagrams

• Utilize Risk Evaluation Tool (RET)• Determine impact dimensions• Determine impact level • Determine frequency value (from data or

SME)• Calculate and validate risk scores

• Identify mitigation alternatives (to address risk drivers and/or impacts)

• Use tranching to prioritize within a program/asset class

• Leverage Bowtie analysis• Develop portfolio of risk mitigations

• Similar to Step (2), adding:• Calculate risk reduction (forecast)• Calculate initial Risk Spend Efficiency (RSE)

(risk reduction/$)• Calibrate risk scores, risk reductions, RSEs• Conduct initial prioritization

• Prioritize across risks and mitigation alternatives

• Evaluate other constraints• Resources allocation• Translate work plans to budgets• Develop short, long-term

strategy• Develop metrics, targets, goals

• Develop and update risk register• Develop and utilize reporting

tools• Report to management and

board• Integrate with RAMP, GRC

• Assign risk taxonomy classification• Identify drivers, risk event, outcomes, and impacts• Populate risk ID template• Define risk statement

1) Please refer to slide 29 for an example.

16

SCE Risk-Informed Decision-Making Framework Aligns with the Cycla 10-Step Model

1) Identify Threats

2) Characterize Sources of Risk

3) Mitigation Identification 3) Indentify Candidate Risk Control Measures (RCMs)

4) Evaluate the Anticipated Risk Reduction for Identified RCMs

5) Determine Resource Requirements for Identified RCMs

6) Select RCMs Considering Resource Requirements and Anticipated Risk Reduction

7) Determine Total Resource Requirements for Selected RCMs

8) Adjust the Set of RCMs to be Presented in GRC Considering Resource Constraints

9) Adjust RCMs for Implementation following CPUC Decision on Allowed Resources

6) Monitoring & Reporting 10) Monitor the Effectivess of RCMs

Decision-Making & Planning5)

SCE's Risk-Informed Decision-Making Framework

Cycla Evaluation Model

Risk Identification & Risk Evaluation

Mitigation Evaluation

1)2)

4)

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Enterprise Risk Management ProgramCurrent Progress and Future EnhancementsSteps Progress To Date Future Enhancements

Risk Identification

• Senior Leadership Discussions• Information Sharing with Risk Management

Groups• Benchmarking and Info Sharing with Peer Utilities• Risk Lexicon and Risk Taxonomy rollout• Standard Risk Templates

• Centralized Risk Register• Systematic Information Sharing

Risk Evaluation• Risk Evaluation Tool (RET) & Initial Pilot• Risk Calculator• Training Workshops & Tutorials

• RET Enhancements• Calibration of Risk Scores• Data Collection & Analytics

Risk Mitigation Identification

• Tranching Analysis (Pilot)• Leveraging of Bowtie Analysis for Mitigation ID• Risk Taxonomy for Drivers

• Structured Risk Mitigation Identification• Synergies Across Risk Mitigation Alternatives• Mitigation Alternatives Portfolio Development

Risk Mitigation Evaluation

• Initial Calibration• Risk Mitigation Evaluation (Pilot)• Risk Spend Efficiency (RSE) calculation (Pilot)

• Enhanced Prioritization• Enhanced Calibration• Integration of RSE into Decision-Making (Pilot)

Decision-Making & Planning

• Consistent Risk Scoring Methodology• Risk-Informed Decision-Making & Planning in

T&D (Pilot)

• Integration with Financial Planning Process• Decision-Making Based on Mitigation

Effectiveness• Transition Management• Prioritization/Optimization• OU and Cross-OU Risk-Informed Decision-Making

Monitoring & Reporting

• New Reporting Tool• Reporting to Board of Directors & Senior

Leadership

• Automated ERM Platform System• Performance Metrics & Accountability Reporting

Development

18

Proposed Future Integrated Risk-Informed Decision-Making Process

Refresh and Ad-Hoc Planning Activities During the Year

19

Comparative Illustration of Event-Focused vs Outcome-Focused Approaches

WireDown

Weather

Mylar

Vegetation

PoleFailure

Wind

Age / Decay

Event-Focused Approach (“bottoms up view”)

Wildfire

Environmental

Safety

Financial

Injury

Property Damage

Outage

Safety

Safety, Financial

Reliability

Freeway/ Road Closure Financial

Wildfire

Environmental

Safety

Financial

Injury

Property Damage

Outage

Safety

Safety, Financial

Reliability

1. Risk Identification – “Bow-tie” and driver analysis identifies all outcomes driven by triggering events

2. Risk Scores associated with Event – Score outcomes using historical and forecasted data

3. Mitigation Identification –Outcomes and drivers identified in Step 1 are used to evaluate or develop targeted mitigations

4. Mitigation Evaluation –Mitigations are scored based on how effectively they reduce triggering events or outcomes

Wildfire

OH Reconductor

Pole Inspection

Pole Replacement

OH Conductor

Pole

Outcome-Focused Approach (“top down view”)Weather

Mylar

Vegetation

Wind

Age / Decay

1. Risk Scores associated with Outcomes

2. Mitigation Identification –Determine the mitigations related to the outcomes

3. Risk / Mitigation built up from Asset Evaluation – risk associated to mitigation (or impacted assets) scored

OH Conductor

Pole

Outcome Mitigation Asset Driver

OutcomeEvent / AssetDriver

n:1

n:1

1:n

1:n

1:n

n:1

1:1

20

Detailed Risk Analysis (Pilots)

• SCE demonstrated detailed risk analysis process through set of pilots in both T&D and non-T&D areas

• Much of the detailed analysis for risk and mitigation scoring was performed after the GRC forecasts were developed and mitigation alternatives were selected

– The analysis was performed to develop our risk-analysis capability across the company– The explicit risk analysis did serve to validate the other analyses performed to build

project scope and develop our request in this GRC in these selected areas– As the process matures, SCE expects to perform such analyses before developing project

scope and selecting from alternatives

• Features of the pilots include:– Safety–related risks– Risk involving T&D assets in key mitigation programs– Risk impacts spanning multiple dimensions– Risks spanning across operational units (non-T&D pilots)– Advancing/testing internal capabilities in development and implementation of risk-

informed decision-making

21

Non-T&D Detailed Risk Analysis (Pilots)Pilot Area Project/Program Risk Summary Testimony

Customer Service RePlatform

Replacement of aged and obsolete customer care & billing system

Failure of customer service system leading to significant system downtime with impacts to key customer service functions

SCE-04, Vol. 03

Power Supply Hydro Dam safety

Dam failure resulting in an uncontrolled rapid release of water

SCE-05, Vol. 03

Business Resiliency Seismic evaluation & retrofit CONFIDENTIAL SCE-07, Vol. 01

Corporate Real Estate Facilities upgrades

Extensive building damage and facility condition leading to worker/public injury lower productivity, and high maintenance costs

SCE-07, Vol. 03

Corporate Security Physical security of critical infrastructure

Physical breach of critical infrastructure leading to injuries, outages, or equipment damage

SCE-07, Vol. 05

22

Risk Analysis Observations, Challenges & Lessons Learned• SCE’s approach is applicable to both electrical and non-electrical assets, but some

refinements will be necessary to use uniform methodologies across the company

• Had to rely extensively on subject-matter expertise for risk and mitigation evaluation– Adequate or specific data is not always readily available– Subject matter expertise is invaluable regardless of data availability– Healthy debate amongst subject matter experts regarding inference and implication of

available data or assumptions made led to better understanding of risks and mitigations

• Work to date, including the pilots, had a significant positive impact on transitioning a large, diverse organization to a risk management culture and use of formal structured risk-informed decision making

• Impact dimensions, levels, and calibration across dimensions and levels will need to be refined to address the risks we are trying to mitigate

• Many-to-many mapping of risks, outcomes and mitigations exist (a mitigation may mitigate more that one risk/outcome), will need to refine risk and mitigation evaluation to account for these

23

SCE’s Overhead Conductor ProgramAn example of risk-informed decision making in SCE’s 2018 GRC

Robert Woods

24

Agenda

• T&D Volume SCE-02, Vol. 1

– Testimony overview

– Assets included in testimony

• Overhead Conductor Program example

– Step-by-Step walkthrough of the risk scoring process

• PRISM Pilot Expected Benefits

25

Asset & Operational Risk Management(SCE-02, Volume 1)

Demonstrates application of risk-informed decision making framework on key T&D assets• Piloted in T&D because assets have the greatest impact on safety and reliability

– Pilot referred to in testimony as Prioritized Risk-Informed Strategic Management (PRISM)

• Elements described include:– Depth of risk analysis and types of models used– Neutrality and cross-functional review of risk scoring process– Reliance on quantitative data supplemented by subject-matter expertise– The influence of risk scoring results on operational and planning decisions

• Benefits of Risk-Informed Decision Making– Funding Allocation, Prioritization, Initiation of new Programs/Projects, Construction/Maintenance

Standards, Identifying Areas of Focus for Capability Development

• Process– Training & Education, Governance Structure, Calibration and Portfolio Development Process

• Represents Progress through March 2016– History, Methodology Discussion, Scope of Risk Scoring, Data & Modeling, Influence on Decision-

Making

• Future Opportunities for Refinements• Appendix

– Presents in-depth details to illustrate level of rigor in analysis and diversity in modeling approaches

26

SCE-02, Vol. 1 Appendix Scoring Details

Scoring Area Related GRC ActivityOverhead Conductors SCE-02, Vol. 8 – Infrastructure Replacement

Poles SCE-02, Vol. 9 – Poles

Underground Structures SCE-02, Vol. 5 – Distribution Construction & Maintenance

Circuit Breakers SCE-02, Vol. 8 – Infrastructure Replacement

Substation Transformers SCE-02, Vol. 8 – Infrastructure Replacement

Underground Cables SCE-02, Vol. 8 – Infrastructure Replacement

4 kV Circuits SCE-02, Vol. 3 – System Planning

Vegetation Management SCE-02, Vol. 4 – Distribution Maintenance & Inspection

Information Presented for Each Scoring Area• Risk Identification• Current Residual Risk Evaluation• Mitigation Alternatives Identification

Mitigation Risk Reduction EvaluationDecision-Making & PlanningKey Takeaways

123

45

27

Overhead Conductor Program• Overview of GRC requests

– Initial request of $4M of O&M in the 2015 GRC to inspect conductor and remediate splices and connectors

– Risk analysis drove $58M in capital expenditures in 2015– SCE is requesting $432M in capital over the 2018 – 2020 period

Historical and Forecast Expenditures1 for OCP

Year Recorded/Forecast(Nominal $000)

2015 $58,126

2016 $142,203

2017 $136,087

2018 $139,514

2019 $143,891

2020 $148,466[1] 2015 recorded expenditures; 2016 – 2020 forecast expenditures as presented in SCE’s 2018 GRC

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Risk Identification – Bowtie & Driver AnalysisA common framework to identify risks

A Bowtie & Driver Analysis maps the progression of a risk from its driver(s), to the triggering event, its outcome and consequences• Helps delineate factors that may lead to the risk event, and the potential impacts

that the outcome of the risk event may have

Risk Statements are used to systematically document risks using a standard syntax of an event that leads to an outcome, measured in impact dimensions

1

Triggering Eventoccurrence or change of a particular set of circumstances

Drivers contributing factors causing an event

Outcomespotential negative impact of an even

Consequenceimpacts of an outcome as classified by the Risk Evaluation Tool

WireDown

Weather

Mylar Balloons

Vegetation

Wildfire

Environmental

Safety

Financial

Injury

Property Damage

Outage Reliability

Freeway/Road Closure Financial

Outage ReliabilityWire Down leading to

Safety

Financial

Safety

Financial

Wire Down Bowtie Diagram

that can have

29

Risk Evaluation OverviewHow often do these risks occur and how impactful are they?

• The magnitude of a risk is a function of frequency and impact

• The Frequency is the amount of forecast negative outcomes in year

• The Impact of an event is taken from the Risk Evaluation Tool– For example, an outage impacting 1,000 customers for 4 hours has a consequence impact of 3

in the Service Reliability dimension1

Risk Score Frequency 10 ImpactX=Likelihood of Event Consequence of Event

Frequency = Triggering Event Frequency X Consequence

Percentage

1 The Risk Evaluation Tool is discussed in more detail in the appendix.

Risk Statement:

2Outage ReliabilityWire Down leading to

Outage Risk Frequency of Outages 10 Impact of OutagesX=

Frequency of Outages = Wire Down Events X Probability of an outage given a Wire Down occurs

Example for wire down leading to an outage risk statement:

Example for wire down leading to an outage risk statement:

that can have

30

Mitigation IdentificationWhat can we do to reduce or eliminate the risk?

• Mitigation plans use a risk-informed approach to consider alternatives to mitigations currently in use

– Existing mitigations (reconductor and branch line fuse installation) provide value by reducing the frequency of wire down events

– Evaluation of Current Residual Risk and Bowtie Analysis supported SMEs in considering alternative mitigations

• Alternative mitigations were identified that target specific drivers to prevent the triggering events

– Aerial bundle cable– Tree wire– Undergrounding

• Other alternatives could reduce the probability of an outcome when the triggering event occurs

– Single-Phase automatic reclosers– High impedance fault detection– Analog radio detection

Risk Statement:

3Outage ReliabilityWire Down leading to that can have

31

Mitigation EvaluationHow much risk will be reduced by the work that will be done?

Mitigation Risk Reduction measures the expected benefits of a mitigation program or project as the risk units reduced by the mitigation.

• Tranche Analysis– Organizes assets or activities into tranches to prioritize work within a program– Circuit-level attributes are used to differentiate overhead conductor risk by

circuit-level tranches

• Mitigation Effectiveness– The measure of a mitigation’s ability to reduce the probability of a triggering

event or an associated outcome

Risk Statement:


Mitigation Risk Reduction = Risk Score w/o mitigation – Risk Score w/mitigation

that can have

32

Decision-Making & PlanningRisk Spend Efficiency is a measure of the efficiency of a mitigation to reduce risk, calculated as the ratio of Mitigation Risk Reduction to cost to implement the mitigation (per $1,000) • Overhead Conductor Program

– The Mitigation Risk Reduction varies by mitigation and by circuit– Cost estimates are also performed by mitigation at the circuit-level

• For example, the cost to reconductor is a function of the miles of conductor that need to be replaced

Circuit Reconductoring BLF Reconductor & BLF

Aerial Cable(Small

Conductor)

Tree Wire(Small

Conductor)Undergrounding Steel Poles

A 31 27 29 42 43 7 4

B 29 3 27 36 37 4 4

C 29 15 24 34 35 3 4

D 24 38 23 30 34 8 4

E 27 16 23 31 36 6 4

5

Example Risk Spend Efficiencies by Circuit and Mitigation1

1 Values are representative showing 5 out of 4,636 circuits.33

PRISM Pilot Expected Benefits• Risk Scoring Process

– Focus on drivers, triggering events, and outcomes results in risk scores that are dependent on objective, measureable values

– Cross-cutting scoring teams comprising program sponsors, engineering, planning, and operations capture input spanning the asset lifecycle

– Analytical approach utilizes data to enhance subject-matter expertise– Common, consistent methodology across all assets and mitigations

• Challenge Session Process– An opportunity for stakeholders across T&D to challenge modeling

assumptions and risk scores– Improves quality of risk scores– Identifies areas for alignment across risk models– Cultivates a risk-aware culture across the organization

34

Appendix:Risk-Informed Planning

35

SCE Risk TaxonomyL0 L1 L2Risk Category Type

Asset Failure

Worker/Employee Error

Process Failure or Lack Thereof

System/IT Failure

Intentional External

Unintentional External

Natural Disasters

Natural Gas-fired GenerationHydro-Electric GenerationOther Generation (Solar, wind, etc.)Transmission Over HeadTransmission Under GroundSubstationDistribution Over HeadDistribution Under GroundControl StationEnergy StorageOtherMeterNetworkOtherInfrastructure ApplicationsDataOtherOffice FacilitiesAviation AssetsFleetOther

Financial/Economic

Strategy/Business Model

Regulatory/Legislative/Legal

People Management

Project Execution

Business Process

Energy Supply, Procurement, and Management

Non-Energy Procurement

Compliance

IT

Non-Asset

Related Risks

Asset-Related

Risks

L3Driver Types

Electric

Customer Service assets

Other facilities and assets

36

SCE Risk Statement Standard Template

37

Risk Evaluation Tool (RET)

38

Safety Service Reliability Financial Environmental Compliance

Impact LevelThe potential impact of a risk event on public or worker safety


The potential of a risk event resulting in a financial cost to shareholders, ratepayers and/or third

parties

The potential impact of a risk event on natural resources such as air, soil, water, plants or animal

life

The potential impact of a risk event resulting in a non-compliance with federal, state, local,

industrial, or operational standards or requirements

Catastrophic(7)

Many Fatalities, Mass Serious Injury or Illness: - Many fatalities of employees, public members or contractors; - Mass serious injuries or illness resulting in hospitalization, disability or loss of work; - Wide-spread illness caused typically caused by sustained exposure to agents.

Customer Hours Impact: - Outage resulting in greater then 20 million total customer hours of interruption.

Financial Costs: - Impact > $3 billion in costs; consider costs to shareholders, ratepayers and third parties.

Environmental Impact:- Resulting in Permanent or long-term damage greater than 100 years;- Irreversible and immediate damage to surrounding environment (e.g. extinction of species).

Non-Compliance Impact:- Actions resulting in potential closure, split or sale of Company.

Severe(6)

Few Fatalities, Serious Injury or Illness; Permanent Disability:- Few fatalities of employees, public members or contractors;- Many serious injuries or illnesses resulting in hospitalization, disability or loss of work;- Localized illness typically caused by acute or temporary exposure to agents.

Customer Hours Impact:- Outage resulting in at least 2 million total customer hours of interruption.

Financial Costs: - Impact between $300 million and $3 billion in costs; consider costs to shareholders, ratepayers, and third parties.

Environmental Impact: - Resulting in acute long-term damage greater than 10 years; - Severe damage to surrounding environment.

Non-Compliance Impact:- Regulator issued cease and desist orders;- Regulators force the shut down of critical assets.

Extensive(5)

Serious Injuries or Illness; Permanent Disability:- Serious injuries or illness to many employees, public members or contractors resulting in hospitalization, disability or loss of work.



Environmental Impact:- Resulting in significant medium-term damage greater than 2 years; - Reversible damage to surrounding environment.

Non-Compliance Impact:- Regulatory investigations and enforcement actions, lasting longer than a year;- Violations that result in fines or penalties and/or multiple large non-financial sanctions;- Regulators force the removal and replacement of management positions.

Major(4)

Serious Injuries or Illness; Permanent Disability:- Serious injuries or illness to few employees, public members or contractors resulting in hospitalization, disability or loss of work;- Several employees, member of the public or contractors sent requiring treatment beyond first aid.



Environmental Impact:- Resulting in moderate medium-term damage greater than few months;- Reversible damage to surrounding environment.

Non-Compliance Impact:- Significant new and updated regulations are enacted as a result of an event;- Violations that result in fines or penalties and/or non-financial sanctions;- Increased oversight from regulators.

Moderate(3)

Minor Injuries or Illness: - Minor injuries or illness to several employees, public members or contractors; - Few employees, members of the public or contractors requiring treatment beyond first aid;


Financial Costs: - Impact between $300k and $3 million in costs; consider costs from shareholders, ratepayers, and third parties.

Environmental Impact:- Resulting in moderate short-term damage of few months;- Reversible damage to surrounding environment with no secondary consequences.

Non-Compliance Impact:- Violations that result in fines or penalties;- No additional oversight from regulators.

Minor(2)

Minor Injuries or Illness: - Minor injuries or illness to few employees, public members or contractors requiring first aid.

Customer Hours Impact: - Outage resulting in at least 200 total customer hours of interruption.

Financial Costs: - Impact between $30k and $300k in costs; consider costs to shareholders, ratepayers, and third parties.

Environmental Impact:- Resulting in short-term minor damage of less than few months;- Immediately correctable damage to surrounding environment.

Non-Compliance Impact:-Self-reported or regulator identified violations with no fines or penalties.

Negligible(1)

- No injury or illness. Customer Hours Impact:- Outage resulting in less than 200 total customer hours of interruption.

Financial Costs: - Impact of less than $30k in costs; consider costs to shareholders, ratepayers, and third parties.

Environmental Impact:- Resulting in negligible to no damage- Very small damage scale, if not negligible.

Non-Compliance Impact:- No compliance impact up to an administrative impact.

Metrics used to determine impact

levels were calibrated across risk dimensions to provide equivalency (i.e. each dimension is

equally weighted)

SAFETY RELIABILITY FINANCIAL ENVIRONMENTAL COMPLIANCE

The potential impact of a risk event on public or worker safety


The potential of a risk event resulting in a financial costs to customers, shareholders and/or third parties

The potential impact of a risk event on natural resources such as air, soil, water, plant or animal life

The potential impact of a risk event resulting in a non-compliance with federal, state, local, industrial, or operational standards or requirements on regulatory oversight, intrusion on company operations or the imposition of fines or penalties.

Risk Evaluation Tool (RET)- Impact Dimensions

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Conc

ept &

Tool

sKe

y De

finiti

ons

Frequency – number of risk events generally defined per unit of time

• Triggering Event Frequency (TEF) – number of times a risk event occurs per year

• Consequence Percentage (CP) – conditional probability of outcome occurring given the triggering event occurs

Impact – The effect or outcome of an event affecting objectives

• Consequence Impact (CI) (Impact Dimension) – severity of outcome measured on a 1-7 scale (see Risk Evaluation Tool)

Risk Score – numerical representation of a quantitative (and/or qualitative) risk evaluation.

Magnitude of risk is a function of frequency (how often) and impact (how severe)

Frequency x 10 Impact = Risk Score

Risk scoring formula

(TEF x CP) x 10 CI = Risk Score

Risk Evaluation

40

Risk Reporting Tool

Risk ID 73

Risk Name Risk Owner(s) Risk Manager(s) Related Corporate GoalPublic Safety - Dam Failure Vice President of Operational Services Manager of Dam & Public Safety

Risk Statement Outcome Related MetricsHigh hazard dams being subjected to major seismic or flood loading, piping, operational failures, deterioration of materials are all potential causes of an Uncontrolled Rapid Release of Water (URRW) leading to injuries and loss of life, destruction of property,long-term environmental damage, failure to be complaint, loss of operation and revenue, and destruction of the project.

Risk ImpactPre-Mitigation Post-Mitigation

Impact Level Frequency Score Impact Level Frequency Score

Safety ✓ Catastrophic(7)

Remote(1) 10,000 ✓ N/A N/A 10,000

Reliability N/A(0)

N/A(0) 0 N/A N/A 0

Financial ✓ Extensive(5)

Remote(1) 100 ✓ N/A N/A 100

Environmental ✓ Extensive(5)

Remote(1) 100 ✓ N/A N/A 100

Compliance ✓ Severe(6)

Remote(1) 1,000 ✓ N/A N/A 1,000

Total Risk Impact 11,200 11,200

Mitigation GRC Project and FundingRisk Assessment Program Project GRC Exhibit Funding RequestSurveillance Cameras (Future)

Emergency Action Plans

41

ERM Risks Mapped to Key Direct Outcome(s) Table Sample

42

GRC Requests Mapped to Key Direct Outcome(s) Table Sample

43

Appendix:Overhead Conductor Program Example

44

Risk Identification – Overhead Conductor Risk StatementsWhat are the events that lead to negative outcomes?

Risk Statements are used to systematically document risks using a standard syntax of an event that leads to an outcome, measured in impact dimensions# Triggering Event Outcome Impact Dimension

1

Overhead conductor down in service

InjurySafety

Financial

2 Wildfire

Safety

Environmental

Financial

3 Property DamageSafety

Financial

4 Outage Reliability

5 Freeway/Road Closure Financial

6 Intact conductor failure in serviceOutage Reliability

Fatality Safety

7 Human contact with intact conductor InjurySafety

Financial

1

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Risk Evaluation: Triggering Event Frequency CalculationWhat triggered the risk?

• Asset risks are organized into tranches or sub-groups with similar risk profiles

– Overhead conductor risk is tranched at the circuit-level – Calculated risk scores are specific to the attributes of each circuit

• Historical, annual system-wide events are forecasted at a circuit-level based on critical attributes:

– Count of wire down events– Historical circuit breaker operations– Available fault duty– Miles of overhead conductor at risk– Visual inspection results

Risk Statement:

2Outage ReliabilityWire Down leading to that can have

46

142

408

305

1,42040,788

305,157

45,320050,000100,000150,000200,000250,000300,000350,000

0

100

200

300

400

500

1 2 3 4 5 6 7

Risk

Sco

re

Out

com

es

Impact

Outage Outcomes and Risk Scores

Outcomes Risk Score

5

Risk Evaluation: Consequence Percentage & ImpactHow often do outcomes occur after the triggering event?

• The Consequence Percentage is the conditional probability of an outcome given the triggering event has occurred

– For example, the probability of a level 3 outage for wire down events is 305860 =35.5%

• The Worst Reasonable Direct Impact (WRDI) is a simplifying assumption that balances risk scores across risk dimensions with various levels of historical data

– The risk score used is the highest risk score across impact levels in a given dimension– For example, the risk score used would be 305,157 which is for level 3 impacts

WRDI Risk Score

Risk Statement:


All Wire Down events1

Wire Down events resulting in an outage

Wire Down events resulting in an outage

at an Impact level1

•860 Events

•860 Outcomes

•Level 1: 142 outcomes•Level 2: 408 outcomes•Level 3: 305 outcomes•Level 4: 5 outcomes

1 Values are illustrative.2 The outage impact levels are taken from the Service

Reliability dimension of the Risk Evaluation Tool.

that can have

47

MRR Evaluation – TEF EffectivenessOf all the scenarios, what is the worst reasonable risk?

• TEF Effectiveness is a measure of a mitigation’s ability to reduce the probability of a triggering event

– For example, Reconductor and Branch Line Fuses impact risk by reducing the likelihood of a wire down

Overhead Conductor Down TEF Effectiveness Estimates by Driver1

4

Drivers Driver Counts Reconductor BLF Reconductor & BLF ClampStar Single Phase

ARHigh Impedance Fault Detection

Analog Radio Detection

Weather 130 28% 11% 36% 0% 19% 0% 0%Mylar Balloons 99 42% 0% 42% 0% 43% 0% 0%Vegetation 95 28% 10% 35% 0% 19% 0% 0%Equipment Failure 76 75% 12% 78% 0% 23% 0% 0%Other Public Action 65 36% 13% 45% 0% 14% 0% 0%Animal 63 50% 19% 59% 0% 34% 0% 0%Connector Failure 61 90% 0% 90% 0% 13% 0% 0%Weather / Vegetation 45 41% 15% 50% 0% 28% 0% 0%Splice Failure 30 90% 0% 90% 26% 0% 0% 0%Crossarm Failure 25 90% 0% 90% 0% 0% 0% 0%SCE Work/Operation 8 0% 0% 0% 0% 0% 0% 0%Environment 2 50% 0% 50% 0% 0% 0% 0%

1 Values are illustrative.48

MRR Evaluation – CP Effectiveness• CP Effectiveness is a measure of a mitigation’s ability to reduce the

probability of an outcome– For example, High Impedance Fault Detection and Analog Radio

Detection both have TEF effectiveness measures of zero, but they reduce the probability of an injury or fatality if there is a wire down event

Overhead Conductor Down TEF Effectiveness Estimates by Driver1

Consequence Reconductor BLF Reconductor & BLF ClampStar Single Phase AR High Impedance Fault Detection

Analog Radio Detection

Property Fire 0.0% 2.8% 2.8% 0.0% 5.7% 0.6% 1.0%

Wildfire 0.0% 2.8% 2.8% 0.0% 5.7% 0.6% 1.0%

Injury / Fatality 0.0% 28.2% 28.2% 0.0% 56.4% 52.5% 95.0%

Outage 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Freeway / road closure 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

4

1 Values are illustrative.49

PRISM Governance Structure

Executive Steering Team

PRISM Governance Committee Methodology

Program Office

Asset StrategyTeams (ASTs)

T&D Public Safety Team

Distribution AST Substation AST Transmission AST

Program Strategy Teams

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Challenge Session Process

February March

Session 1 2/19

Session 23/14, 3/15

Session 33/23, 3/25, 3/28

Challenge Session #1

• Goal: validate scoring withinAsset Teams

• Participation: All members of individual Asset Teams and Programs


• Goal: validate scoring acrossAsset Teams

• Participation: Senior Manager & below stakeholder representation


• Goal: utilize calibrated scores to guide funding decisions and revise operating plan

• Participation: Principal Manager, Director, and Vice President

Calibrated and validated results for PRISM 2016

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sce 2018 grc · sce 2018 grc safety & risk workshop november 2, 2016. 10:00 – 12:00pm . paul...

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