Fleet Safety Initiative Status Summary Deborah Majeski DTE Energy Company October 7, 2008
DTE Energy s Primary Subsidiaries are Gas and Electric Utilities 2
Non-Utility Energy Related Businesses 3
Impact of Motor Vehicle Accidents Bucket truck tip-over Head-on Collision Head-on Collision Truck hits car at 65 Mph 2 Fatalities Driving too fast for road conditions Driving while Tex Messaging Driving while on Cell Phone 4
Introduction Motor vehicle accidents cost employers over $60 billion annually in medical care, legal expenses, property damage and lost productivity. Average per-accident cost to employers -- $17,000 (National Safety Council) Average cost per non-fatal injury accident -- $110,000 (National Safety Council) Accidents drive up the cost of benefits such as workers compensation, Social Security and health / disability insurance. 5
Motor Vehicle Accident Statistics Work-Related Fatal Events 1600 1400 1343 1346 1346 1393 1442 1496 1365 1409 1373 1353 1398 1437 1329 1200 1158 1242 1000 800 600 400 1044 1074 1080 1036 927 860 810 822 770 809 706 665 691 716 714 721 734 719 651 651 677 696 643 609 632 600 618 557 565 590 582 579 585 547 571 553 520 505 531 559 567 516 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Highway Incidents Homocide Falls Struck by Object 2006 Motor Vehicle Accident Statistics National Michigan DTE Energy Accidents 5,973,000 315,322 110 Injury Accidents 2,575,000 81,942 12 Fatal Accidents 38,588 1,085 0 6
Past and Current State Current State: 442 motor vehicle accidents reported, including 58 involving injuries, reported between 1/2003 and 8/2008 Total costs of motor vehicle accidents since 2003 exceed $12 million, based on NSC average costs of $17,000 per non-injury accident and $110,000 per injury accident No active in-house defensive driving training program beyond Commercial Driver License (CDL) training No tracking or risk assessment of employees driving on company business beyond traffic offenses for CDL holders No comprehensive vehicle accident data that provides an understanding of pressing issues across the enterprise Inconsistent implementation of policies and procedures for employees driving on company business Inconsistent / incomplete reporting of cost of vehicle repairs, medical care, property damage, workers compensation or litigation within business units or across the enterprise Numer of Motor Vehicle Accidents Cost in Millions of Dollars 500 450 400 350 300 250 200 150 100-50 Historic Motor Vehicle Accidents (Reported) 2003 2004 2005 2006 2007 2008 YTD Injury 12 10 8 12 7 9 Non-Injury 45 56 80 98 66 39 Running Total 57 123 211 321 394 442 Historic Motor Vehicle Accident Costs Figures based on National Safety Council estimated cost of $17,000 per non-injury accident and $110,000 per injury accident $13 $10 $7 $4 $1 -$2 2003 2004 2005 2006 2007 2008 YTD Injury $1.320 $1.100 $0.880 $1.320 $0.770 $0.110 Non-Injury $0.765 $0.952 $1.360 $1.666 $1.122 $0.816 Running Total $2.09 $4.14 $6.38 $9.36 $11.26 $12.18 7
Ideal State DTE Energy maintains a fleet safety program that: Provides training that improves employee s ability to avoid personal injury and property damage while driving company or personal vehicles on the job. Monitors and assesses the risk of motor vehicle accidents for individual employees. Provides appropriate steps to mitigate risks associated with motor vehicle accidents through information/feedback loops and training. Consistently tracks the causal factors and costs associated with motor vehicle accidents. 8
Version: # 06/02/08 Project Charter Gate Status: Pre Gate 1 X Gate 1 Gate 2 Gate 3 Gate 4 Project Name: Proposed DTE Energy Fleet Safety Initiative Program to Reduce Motor Vehicle Accidents Problem Statement DTE Energy relies heavily on the use of specialized trucks, service vans and passenger vehicles to provide reliable delivery of power to its customers yet has no active program to mitigate risks/costs of motor vehicle accidents or consistent process for tracking causal factors and costs associated with motor vehicle accidents. Estimated completion date Team Members & Roles of project June 2009 Pilot Q4 2008 Champion: Process Owner: Key Stakeholders: Team Lead: Core Team Members: Support Team Members: Black Belt Mentor: Financial Analyst: Ideal State DTE Energy maintains a fleet safety program that: Provides training that improves employee s ability to avoid personal injury and property damage while driving company or personal vehicles on the job. Monitors and assesses the risk of motor vehicle accidents for individual employees Provides appropriate steps to mitigate risks associated with motor vehicle accidents through information/feedback loops and training. Consistently tracks the causal factors and costs associated with motor vehicle accidents. Gaps No active driver safety training. No tracking or risk assessment of employees driving on company business beyond traffic offenses for CDL holders. Minimal screening/evaluation of driving records for employees driving on company business. Inconsistent and incomplete reporting of costs associated with motor vehicle accidents. Current State DTE Energy operates over 2900 company-owned motor vehicles and many employees use personal vehicles for work. There is no active driver safety training for or risk assessment of drivers. No consistent method for tracking vehicle accident data within business units or across the enterprise. Case for Change Motor vehicle accidents were 3 rd highest cause of OSHA recordables for DO in 2007. DTE Energy recorded motor vehicle accidents between 2003-2007 DTE Energy paid xx accident-related costs during period of 2003-2007. Milestones/Countermeasures (actions, owners & timing) Action Item Owner Due Date Status Create RFP for suppliers of training and risk assessment TBD TBD TBD Select supplier(s) TBD TBD TBD Integrate training content with SAP LSO TBD TBD TBD Initiate training and risk assessment TBD TBD TBD Key Business Assumptions Training and driver risk assessment will reduce the number of injuries and costs associated with motor vehicle accidents. Improved record keeping will provide metrics needed to track and reduce costs associated with motor vehicle accidents. Form revision date: 05/18/2005 Challenges/Risks Cost of purchasing/providing training. Technical issues related to SAP LSO. Uncontrollable causal factors for motor vehicle accidents may make evaluation of training effectiveness difficult. Revise and implement accident reporting policies/procedures. TBD TBD TBD Number of motor vehicle accidents Metric(s) Baseline Target Current Cost of motor vehicle accidents (5 year average) 73 TBD TBD $2.25m TBD TBD 9
Core Team Deliverables Motor Vehicle Accident Reporting A consistent method for documenting critical facts of all motor vehicle accidents. Mileage Tracking A consistent method for documenting number of miles driven by motor vehicles owned or leased by DTE Energy. Motor Vehicle Inspections A consistent method for inspecting motor vehicles owned or leased vehicles for features critical to safe operation and damage prior to use. Training for DTE Energy Employees A plan for training DTE Energy employees who drive as part of their work. Training for Affiliate Companies A plan for training affiliate employees who drive as part of their work. Benchmarking Ranking of DTE Energy against other similar energy companies on key driver safety and motor vehicle accident cost metrics. IT Infrastructure Changes to IT Infrastructure needed to implement record keeping and training. Metrics / Reports A consistent method for identifying, tracking and reporting critical indicators of fleet safety. Driver Risk Assessment A consistent method for evaluating the risk associated with individual employees who drive motor vehicles owned or leased by DTE Energy. Marketing / Communications Communication of Fleet Safety Initiative actions, features and benefits to employees who operate or manage employees who operate motor vehicles as part of their work at DTE Energy. 10
Core Team Deliverables Request for Proposal Requests for proposals (RFP) covering all goods and services that will be purchased from outside suppliers as part of the Fleet Safety Initiative. Policies & Procedures for DTE Energy drivers New and revised policies and procedures for drivers of motor vehicles owned or leased by DTE Energy and personal vehicles used on company business. Selecting Training Suppliers Recommendation of supplier for training materials. Policies & Procedures for Affiliate Companies Policies and procedures that implement Fleet Safety Initiative elements at DTE Energy affiliate companies. Budget / Scorecard Set up tracking tools to monitor FSI spending and motor vehicle accident-related costs. Legal Issues Evaluation of potential legal exposure from new and revised policies and procedures relating to Fleet Safety Initiative project. Fleet Safety Database A database that manages data on motor vehicle accidents, motor vehicle inspections, and driver risk. Pilot Implement FSI in DO Service Operations and identify needed changes to FSI elements based on implementation. 11
External Benchmarking Results Driver Training 80% do not provide any driver training for employees who operate company owned or leased motor vehicles 100% do not provide any driver training for employees who operate their personal vehicles on company business. 100% provide specialized training based on the type of company owned or leased on-road vehicles they operate. 80% provide general driver training applicable to any driver operating any type of vehicle to reduce the number and/or severity of motor vehicle accidents. 100% provide specialized driver training based on the vehicle(s) an employee operates to reduce the number and/or severity of motor vehicle accidents. 100% conduct regularly scheduled vehicle safety inspections. The following delivery methods are used by companies surveyed to provide driver training: 60% use Instructor-Led provided by outside suppliers 50% of the companies using Instructor-Led training include hands-on components (participants drive vehicles as part of the training 60% use Web-Based Training 60% use Computer-Based Training 12
External Benchmarking Results Motor Vehicle Policies 100% allow first responders or managers with multiple location responsibilities to use company owned or leased vehicles to commute between home and work. 90% do not allow employees to operate company owned or leased vehicles for personal use. 100% track the driving records of CDL-holding employees who routinely drive on company business Motor Vehicle Related Metrics 60% track motor vehicle accidents per million miles driven. 60% track OSHA recordables resulting from motor vehicle accidents per million miles driven. 80% track the cost of motor vehicle accident repairs. 60% track liability costs associated with motor vehicle accidents. 70% - 90% of motor vehicle accidents reported during 2007 by companies surveyed were classified as preventable. Motor Vehicle Repairs 80% use outside suppliers to repair company owned or leased vehicles damaged in accidents. The remaining 20% use both internal resources and outside suppliers. 13
Benefits Reduced incidence of motor vehicle accidents Establish expectations regarding safe driving practices Document and communicate traffic safety policies and procedures Document management s commitment responsibility, authority and accountability for safe driver and vehicle operation Decreased operating costs Identify loss prevention and control strategies that will benefit DTE Energy s bottom line Control costs associated with vehicle accidents in the workplace Reduce exposure to motor vehicle-related liabilities Enhanced record keeping Satisfy local state and federal laws and regulations governing traffic safety in the workplace Bring motor vehicle accident tracking in line with industry standards Provide an accurate and comprehensive picture of costs associated with motor vehicle accidents Improve tracking of motor vehicle accident causality Improved employee relations and morale Demonstrate concern for health and well being of employee s family members 14
Recommendations Reduced incidence of motor vehicle accidents Invest in web-based defensive driving program: Initial Remedial Refresher Ongoing Invest in hands-on driving program Train high risk drivers in Smith Systems method Decreased operating costs Decrease injury and property damage costs associated with motor vehicle accidents by improving driving skills of DTE Energy employees who drive as part of their work Mitigate liability by developing a history of affirmative steps to increase driver safety among DTE Energy employees Enhanced record keeping Consolidate all motor vehicle accident related costs in one centralized location Enhance reporting of motor vehicle accidents to improve identification of causality and assess preventability Conduct routine motor vehicle inspections including safety equipment and damage assessment for all DTE Energy vehicles Improved employee relations and morale Promote Driving safety to the heart through proactive communication tools: Newsletter Web site Provide training program for family members 15
Program Elements Database Risk Analysis Hazard Perception Evaluation Web-Based Training Instructor-Led Training Centralized home for Fleet Safety data. Consolidation of accident data. Motor Vehicle Records. Evaluation of individual driver s risk based on: Motor Vehicle Record. Accidents with DTE Energy vehicles. Performance on Web-based training. Evaluation of driver s ability to identify potential hazards while driving. Planned for use with high-risk drivers only. Assignment of web-based training modules based on performance in evaluation. All drivers in program complete at least 3 modules: One module on relevant DTE Energy policies. Two modules for all drivers in program. Additional topical modules based on incidents (traffic citations or accidents with DTE Energy vehicles). High risk drivers participate in instructor-led training: Training includes on-road practice with feedback. 16
Training Design DTE Energy Policy Training All drivers in the program complete training on current DTE Energy policies on use of company vehicles and employee-owned vehicles for company business. Passing score is 80%. Participants re-take training until passing score is achieved. Hazard Perception Evaluation All high-risk drivers complete Hazard Perception Evaluation. Additional remedial training modules are assigned based on areas needing improvement based on evaluation. Participants re-take training up to three times to achieve passing score. Supervisors provide assistance to drivers who cannot achieve passing score within three attempts. Supervisors may recommend participation in instructor-led training for drivers who cannot pass remedial training. Web-Based Training All drivers in the program complete two web-based training modules over the course of one year. Training topics selected for applicability to greatest number of drivers in the program. Participants re-take training up to three times to achieve passing score. Supervisors provide assistance for drivers who cannot achieve passing score within three attempts. Incident-Triggered Web-Based Training All drivers in program who accrue additional points on driving record or are involved in preventable accident with DTE Energy vehicle receive one or more remedial web-based training modules. Training topics selected by supervisor from library of 26 modules. Participants re-take training up to three times to achieve passing score. Supervisors provide assistance for drivers who cannot achieve passing score within three attempts. Supervisors may recommend participation in instructor-led training for drivers who cannot pass remedial training. Instructor-Led Training High risk drivers participate in Smith Systems instructor-led training to get hands-on experience with feedback from professional driving instructor. Assignment of instructor-led training based on accidents with DTE Energy vehicles, Motor Vehicle Record, performance on training and supervisor recommendations. We may have DTE Energy employees trained to present Smith Systems training. 17
Sustainability Plan Strategy 1. Enhance Motor Vehicle Record Keeping Action 1. Streamline Motor Vehicle Record Tracking or all Employees Driving on company business 2. Create Central Database for Motor Vehicle Accident Reporting 3. Enhance Vehicle Selection, Maintenance and Inspections 4. Implement Sustainability / Communication Plan 2. Develop a Central Motor Vehicle Accident Database to Track all Expenses associated with Vehicle Accidents 3. Review / Revise Vehicle lease Specifications, Maintenance and Inspection routines 4. Develop Baseline Metrics and Begin tracking Motor Vehicle Accident Data 18
Unresolved Issues Criteria for designating a driver as high risk. Criteria for assigning drivers to instructor-led training Threshold for including drivers who use their personal vehicles on company business in the program Identifying employees who routinely drive DTE Energy vehicles Motor vehicle accident data to be captured in centralized database Scope and frequency of motor vehicle inspections Strategy for roll-out of pilot across Service Operations Strategy for roll-out of program across enterprise 19
Driving Fleet Safety Newsletter Purpose To communicate Fleet Safety Initiative progress to key stakeholders. First Issue Updates to core elements of Fleet Safety Initiative, including: Benchmarking Communications Budget/Scorecard Driver Risk Assessment Fleet Safety Database IT Infrastructure Legal Issues Driving Safety to the Heart! Metrics/Reports Motor Vehicle Accident Reporting Motor Vehicle Inspections & Pilot Non-utility Training/Vehicles Policies/Procedures Training Supplier Selection Deborah Majeski (313)235-7601 Majeskid@dteenergy.com 20