New risks increase the urgency to use safety management systems

By Caroline Winn and Grant Davies

Over the last few decades, electric and gas utilities have reconsidered and reinvented the kind of services they provide, asking themselves several key questions. Are they reliable? Are they clean? Most importantly, are they safe? Safety efforts used to focus purely on keeping utilities’ personnel as safe as possible in a potentially hazardous workplace.  Today, utility safety initiatives have broadened considerably.

The good news is that these industry-wide safety initiatives have been successful, with workplace-related injuries dropping rapidly, from 6.3 cases per 100 full-time equivalent workers to 2.2 over the period from 2000 to 2019, according to data from the U.S. Bureau of Labor Statistics. The even better news is that these firms are beginning to re-imagine the scope of their safety programs given new risks and concerns and are redefining the meaning of safety among utilities.

Regulators, stakeholders, consumers and environmental groups have provided additional impetus and urgency. The concept of addressing all operational activities as part of “process safety” took hold among gas companies after the 2010 San Bruno pipeline explosion.  Electric utilities are also now starting to adopt this approach and San Diego Gas & Electric (SDG&E) is at the forefront of this change.

Building on its success in wildfire safety and mitigation and emergency response, SDG&E identified an opportunity to address safety in a more comprehensive fashion.  For example, safety within the design and engineering group is not just about the safety and well-being of its members.  Rather, it expands beyond the individual group to include the safety of those affected by the department’s activities, including fellow employees, contractors, and the public. So when design and engineering employees change out a piece of equipment or specify use of a new tool, they should be performing a risk analysis, meeting with operational employees and considering implications for the end user, including: Will it be safe to operate in the field? Will it operate the way it is intended?  Where should it be located? How will employees be trained to use it? This allows for an integrated approach to risk and safety.   

To achieve an enterprise-wide view of safety risks, better document incidents, and improve risk avoidance and mitigation, SDG&E collaborated with Accenture to lead the development of a new safety framework that addresses “process safety.” Essentially, this means building safety into every process, re-imagining the way processes are detailed and described, then developing the communications and change management techniques needed to make sure that all stakeholders understand and adopt the new approach.

From the outset, SDG&E established a strong governance framework for its Safety Management System (SMS). An SMS Executive Steering Team comprised of executive leadership, as well as an SMS Governance Team that includes a cross-functional group of directors from across the organization was formed. Additionally, full-time resources were dedicated to lead the SMS program. Speed has been another key to success; a group of priority processes were identified and acted upon immediately to ensure completion by the end of 2020. Quick wins demonstrated progress and helped us understand what a unified view of risk would really look like.  The utility now knows how to apply uniform standards to all processes and is working through every discrete operational process in the organization. 

Learning from other industries

Learning from other industries

SDG&E’s SMS used American Petroleum Institute (API) 1173 process safety guidelines developed for the pipeline sector of the gas industry as a starting point. The project looked at every aspect of safety management, including leadership and stakeholder engagement, and it drew upon Accenture’s industry-wide experience in enhancing safety practices and in developing a mechanism for change.  

SDG&E’s SMS also incorporates leading practices from other standards including International Organization for Standardization (ISO) 55000 (asset management), ISO 31000 (risk management standards), and ISO 22320 and FEMA Incident Command System (emergency management standards). 

In designing the SMS, SDG&E and Accenture started with the five pillars of utility industry safety:

  1. people safety,
  2. gas and electric operations,
  3. risk identification and management,
  4. asset management, and
  5. emergency preparedness and incident response.

We reviewed these pillars in the context of key safety initiatives, programs, processes and committees, finding ways to link reporting and analysis so that the five pillars are mutually supportive. The SMS was designed to be company-specific, incorporating wildfire-specific components, for example, given the risk of wildfire in SDG&E’s service territory.  The SMS also establishes priorities for the organization — and creates a roadmap for success, with appropriate metrics to measure progress along the way.   

Key Elements of the Safety Management System

The concept behind a SMS is to reinforce the company’s safety culture by building safety into all operational processes. Key elements include: 

  • Integrating safety with risk and asset management. Safety is built into design and engineering initiatives with all activities evaluated for risk using enhanced quantitative risk data and other leading indicators. 
  • Using analytics and other technologies to set goals and measure progress. Safety goals are benchmarked against national standards. Performance analysis supports rapid measurement and recalibration, leaving no room for initiatives to go off-course. 
  • Enhancing work processes to build in SMS guidance. More than 40 business processes have been evaluated and, as appropriate, redesigned to focus on safety, enhance documentation, and be consistently applied company wide.
  • Employing change management techniques for communications and training. Using up-to-date digital and remote learning technologies ensures employees and contractors receive the information and tools needed to anticipate, identify, assess and communicate risks. 
  • Creating new ways to raise safety concerns. The SDG&E quality control and quality assurance programs incorporate safety as part of standard review processes. The SMS links to the Operating Unit Risk Registries (OURRs) to provide a bottom-up approach to risk identification and increase operational employee engagement. In addition to creating standardized ways to report issues, this linkage allows consistent risk scoring methodologies in enterprise-wide assessments of proposed mitigations. 

While SDG&E had an impressive worker safety record, the SMS already is delivering additional significant benefits with a decrease in recordable incidents of 19 from 2019 to 2020.  This reduction crucially means less downtime and greater overall productivity. And, while the emphasis on preventing incidents before they occur helps keep workers safe, it also contributes to employee morale, which is a vital consideration during the COVID-19 pandemic.

Full implementation of SMS is targeted for completion in 2021.  Longer-term, SMS is expected to reduce risk which will help protect SDG&E’s good reputation and strengthen positive relationships with regulators and policymakers at the local, state and national level. 

When incidents do occur, there is now a faster response time, as managers already know what the company policy is, what processes to follow, and what they should do in any foreseeable situation. This helps keep small problems from turning into larger ones. 

The Big Picture for the Industry

We believe the electric and gas utilities industry should be laser focused on what “safety” really means in the face of evolving challenges on regulatory, environmental, consumer, and shareholder fronts. Aside from avoiding unsafe practices, there are numerous benefits to reap from developing a leading safety culture including attracting and retaining highly skilled workers.  Establishing a reputation as a business that has integrated risk and safety with environmental and sustainability concerns can go a long way toward making that happen. 

SDG&E’s SMS is not just another safety program; it is a strategic, more deliberate, holistic approach to safety.  It will provide a cohesive framework to build upon SDG&E’s strong safety culture and integrate those new and existing processes. This is not an easy undertaking, and it takes ongoing collaboration between management and frontline workers to ensure SMS and safety aren’t only top priorities but remain rooted in SDG&E’s core values.

Utilities have always focused on occupational safety. With SMS, however, SDG&E has been able to add a new tool to its toolbox by incorporating safety considerations into every work process and practice. This is an evolving process; the SMS is founded on soliciting stakeholder feedback, learning and continuous improvement. SDG&E’s SMS demonstrates how the right framework, a committed leadership team, a receptive workforce and a sense of urgency to address a key industry challenge can deliver desired results. 


About the Authors

Caroline Winn is chief executive officer for San Diego Gas & Electric (SDG&E), one of Sempra Energy’s regulated California utilities. Previously, she served as the chief operating officer of SDG&E, overseeing operations of the utility’s gas and electric infrastructure assets, and customer services. In that role, Winn is widely recognized for SDG&E’s national leadership in sustainability, technology and innovation, including the company’s significant safety and wildfire mitigation efforts. Winn also served as chief energy delivery officer, managing all energy delivery activities for SDG&E, including electric distribution operations and gas services, customer services, and external and state legislative affairs. Since joining the company in 1986 as an associate engineer, Winn has held several leadership positions with SDG&E and Southern California Gas (SoCalGas). Winn currently serves on the board of directors for Veloz, Monarch School and Smart Electric Power Alliance; the executive council for Western Energy Institute; and the director’s council of the Scripps Institution of Oceanography.

Grant Davies is a principal director in Accenture’s Utilities business and the founder of Davies Consulting (a recent Accenture acquisition).  Grant is based in Washington, DC. Grant has over 30 years’ experience consulting the utility industry on safety, emergency management, risk, and asset investment management.

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