The E.ON U.S. Approach To Effective Employee Safety. Chris Hermann Senior Vice President, Energy Delivery

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1 The E.ON U.S. Approach To Effective Employee Safety Chris Hermann Senior Vice President, Energy Delivery

2 E.ON U.S. Safety World-class safety performer Overseen by the E.ON U.S. Safety Council Ensures internal sharing of best practices Closes internal gaps Ranked among the best of E.ON market units worldwide Ranked among the best in the U.S. energy industry Among the nation s lowest employee recordable injury rate 1.20 vs utility employee industry average Among the nation s lowest contractor recordable injury rate 1.94 vs utility contractor industry average Have won national and international awards and recognition Have a best-practices contractor safety management program

3 Safety Performance (Lost-Time Incident Frequency) E.ON Market Units Oct E.ON US E.ON Sverige E.ON UK E.ON Energie E.ON Ruhrgas* E.ON - Gruppe 3 target 2007 *without E.ON Gaz Romania

4 Employee and Contractor Recordable Injury Rates Comparison of the National Safety Council, Edison Electric Institute Top Quartile and E.ON U.S NSC Contractor Industrial Average NSC Industrial Average EEI Top Quartile E.ON U.S. Business Partners E.ON U.S. Employees

5 Safety Culture vs. Safety Program In a safety culture, employees think and work differently Work with authority; use good judgment Are very involved in safety processes Raise issues/provide constructive suggestions Are proactive in thinking and preventing incidents Fill out/follow-up on close-call and incident reports Actively participate in audit processes

6 Building A Safety Culture The Foundation Have an unwavering desire to change Relentlessly pursue safety excellence Learn to value all your people Establish a defined safety process Goals, consistent tracking, measurements Equally enforce safety practices and procedures Develop a safety philosophy by which to conduct all business Safety First No Compromise

7 Building A Safety Culture The Process Establish an unwavering commitment by senior management Top-down, bottom-driven approach Close the gaps Demonstrate strong leadership Communicate; reinforce messages with actions Scrutinize safety practices Drill down to the root causes Establish involvement/responsibility/accountability among employees Strengthen contractor partnerships Instill strong leadership

8 Building As Safety Culture The Leadership Take command of your organization Demonstrate sincere concern for employees Demonstrate that safety is a priority over: Budgets Customer service Deadlines Peer pressure Clearly set safety expectations and demand employees meet them Empower your employees Walk the talk; actions speak louder than words

9 Develop and Strengthen Contractor Partnerships Held to the same company/regulatory standards as employees Have equal responsibility/accountability for managing safety Must meet or exceed expectations Managed through a Five-Step Process Evaluation, or Passport certification process Communication Training Measurement Accountability

10 Maintaining a Safety Culture Safety success is cyclical Expect positive results to fade with time Re-energize the workforce Reinforce the foundation for your culture Mitigate complacency Timing is critical Focus on the fundamentals Use a fresh approach Involve employees Communicate, communicate! Be relentless The results will be positive zero incidents!

11 Safety Provides Collateral Benefits Safe companies are: Are profitable companies Have successful recruiting Viewed as good corporate citizens Have high employee morale Have regulators/government officials as allies Viewed by customers as providing better customer service Safety culture is the foundation of our business

12 Direct Cost Reductions (Workers Compensation, Medical Costs, Legal Fees, Investigative Expenses, etc.)

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