Safety Initiatives

Key Components for Continuous Safety Improvement

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2003 2004 2005 2006 2007

Year

Mining Safety Performance

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2003 2004 2005 2006 2007

Year

Mining Safety Performance

Safety Performance Milestones

Winfield South Mine 2,000,000 hours without a disabling injury

Oak Hill Mine 4,000,000 hours without a recordable injury

Beckville Maintenance Dept. 1 year without a disabling injury

Beckville Mine 6 months injury free

Martin Lake Railroad 18 months without a disabling injury

Tatum 1168 days without a recordable injury

Big Brown Mine 8 years without lost time injury

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2003 2004 2005 2006 2007

Year

Mining Safety Performance

Safety Performance Status ’07 vs. Prior Year

Lost-time rate 54% improvement

Dart-rate 59% improvement

80% of mining operations worked without a lost-time injury

30% of mining operations worked without a recordable injury

Total incident rate 34% better than industry average

1st Quarter Accomplishments

Completed comprehensive MSHA 8-hour refresher training Initiated studies (geotech) for ground control at all sites MSHA Safety stand downs by managers all mines with all employees Completed safety blitz @ BB, KO, TO, MO Retrained RR personnel on car maintenance @ ML & MO Safety Performance Solutions safety survey/gap analysis WS

• Started phase 1 of behavior process training Complete review of safety reps job activities Preop train the trainer started Developed supervisor safety training program Completed safety database specifications and vendor review Updated safety handbook ready for union/labor relations review Identified vendor for drug and alcohol baseline/random testing Held one day training for safety reps to address standardization Prepared draft template for addressing awards & recognition Defined top 10 process safety initiatives

• Identify a training budget as a line item to support all employee safety training

• Finalize vendor contract for turnkey drug testing process

• Gain consensus for award & recognition process across Luminant

• Supervisor safety leadership training completed

• Phase 2 of behavior based training at Winfield South completed

• Review Luminant’s safety process and strategic direction

• Leverage our commitment on safety to enhance relationships…build management

trust/credibility

•Developed contractor talking points/issues to host a conference call 3rd quarter

• Identify key issues for a union management summit on safety gaps

• Focus on craft accountability and reducing tolerance for not following the rules

• Completed action plan for integrating process safety

• Created taskforce to update Rail Road task training and preop process

• Conduct safety blitz @ Beckville... Oak Hill, and Tatum completed

Second Quarter Activities for Continuous Safety Improvement

Key Strategies Continuous Safety Process Improvement

Communicate a shared vision Senior management involved in safety performance celebrations Reinforce the message that “If it’s not safe, don’t do it Support sharing of real time safety information through a comprehensive

database

Remove obstacles and empower broad based action among supervisors Clearly define supervisors role in safety by focusing on:

Confronting unsafe practices Reinforcing safe practices Balanced daily view of productivity, safety, and quality Supervisors will complete a comprehensive safety leadership

training program

Strategic Issues

Transition BST & SPS to Luminant defined behavior process

Identify a needs assessment for potential health risks of environmental exposures

Develop medical standards for new hire and return to work job placement

Conduct periodic and routine industrial hygiene sampling protocol

Drive safety performance by activities based metrics ( # of observations, safety inspections,

near-miss reporting, etc.)

Develop a comprehensive communication plan to achieve optimum awareness

Clearly define accountability structure for all operations/staff stakeholders

Transition KPI’s to total incidents

Implement a comprehensive wellness process and tracking system

Incorporate near-miss reporting and corrective action process

Align ROI and Safety to enhance awareness with job package process

Hold management workshop for benchmarking world class and defining Luminant safety

process gaps

Safety Reps Routine Job Activities

Allocation of Time Distribution for Current Job Priorities

Safety and Health : Key Activity Classifications

Administration

Communicating the vision

Medical Care

Policy/Procedures/Guidelines

Training & Development

Awards and Recognition

Regulatory/Internal Compliance Regulatory/Internal Compliance

Incident investigations. Injury investigations (root cause analysis) Equipment/facility damage investigations Near miss investigations Fire investigations Each investigation involves a quick summary and incident gram distributed. Follow up review to ensure corrective action was initiated.

Maintaining regulatory and other safety related reports. Participate in monthly safety rep meeting. Attend committee functions (central safety committee, mine maintenance and

operations meetings, electrical committees, and local safety rep meetings. General administrative tasks (emails, phone messages, face to face discussions.

AdministrationAdministration

CommunicationCommunication

Establish clearly defined goals and expectations. Sponsor continuous sharing of best practices. Capitalize on streamlining information systems.

Real time reporting as events occur Safe production as a daily message

Posture safety as a core value Internal publications Regulatory arena (MSHA/OSHA) Public forums Address safety as an agenda item for all meetings

World Class Safety Culture

Operational Safety

Management Commitment

Personal Commitment to Safe Behavior

Vision, Safety Goals and Metrics

Fleet S

afety Standardization

Behavioral S

afety System

Safety Inform

ation System

Risk and S

hared Services

Health &

Wellness

Rew

ard & R

ecognition

Training &

Skills D

evelopment

Subject: Thermo Safety Action Plan

Daily rides with supervisors for some one on one feedback and gain insight

as to what issues they see as opportunities for improvement and concerns.

Talk to at least 10-15% of the craft employees to understand their issues

and concerns.

Focus on gaining insight as to recommendations by both groups on taking

corrective action.

Maintenance is a primary area to understand barriers to timely corrective

action on equipment repair and how the status of repairs is communicated.

Held shift meetings @ Thermo to discuss continued commitment to safety

as a priority, employee accountability to shut down unsafe equipment,

importance of communicating with management and stress the open door

policy, and address bringing back two supervisors.

Subject: Thermo Safety Action Plan

Attend daily shift change meetings and reinforce the message that

we are facilitating best practices and want everyone’s

support/recommendations.

Attend Thursday safety meetings to discuss general observations

and point out areas that are handled well and ask questions about

issues of concern.

Consider how well preops are appropriately

identifying/documenting issues and aligned with what you observe.

Spend time with the BST facilitators (Jackie Hooker/Lyle Lawler) and

gain their perspective on gaps in the behavior process and general

views on safety concerns and processes that are working well.

Two Week Culture Survey

Major areas for improvement:

• Communication• Accountability

• Teamwork

Two Week Culture Survey - Communication

Problem (Poor communication) Solutions

• Safety∙ Central Safety Committee∙ BST Action Plan tracking system∙ Recognition of achievements∙ SPS Safety Survey and Assessment

• Operating System∙ New visual management system∙ Process Improvement Form feedback

• Maintenance/Operations∙ G Area plan∙ Communication of weekly plan

Two Week Culture Survey - Accountability

Problem (Lack of action to correct hazards)

Solutions• Increased accountability for all employees (including but

not limited to)∙ Housekeeping (facilities and equipment)∙ Highwalls/Spoil (parking under and/or working near)∙ No smoking in shop∙ Ramp, haulroad and berm conditions∙ Lock out / Tag out procedures∙ Safe equipment operation

• Potential for counseling and/or discipline

Safety The Next Steps

Key Characteristics Top Decile Safety Performance

Commitment/Involvement Leadership Team

Standard Practices

Standardized Behavior-Based Process

Focused Communications

Measurement (leading indicators)

Ownership

Key Strategies Continuous Safety Process Improvement

Drive out complacency and maintain a sense of urgency Focus on uniform systems, processes, and practices Define accountability and responsibility through the fleet

Create a guiding coalition for organizational change Utilize a comprehensive safety culture survey to identify gaps Develop site specific tactical/strategic action plans based on survey

priorities

Build a shared vision for daily integration of safety with productivity Identify activities based metrics (leading indicators) Focus on sharing best practices

Standard Practices

Implement a uniform approach to exposure monitoring (Industrial Hygiene

Sampling)

Define minimum job-specific physical requirements

New hire medical exams including chest x-ray and pulmonary function testing

Return-to-work medical evaluations

Establish uniform contractor compliance guidelines

Incorporate a systems approach to accident investigation

Establish a safety framework throughout the company

Provide for comprehensive focused safety training (budget line item)

Correct deficiencies as soon as possible

Reduce tolerance level for not following the rules

Decision-based Safety

Identify and promote safe behavior

Create a mindset that all injuries are preventable

Promote individual accountability for safety/coworkers

Benchmark alternatives to BST

Initiate pilot program at Winfield South as potential

transition alternative March ‘08

Enable broad-based action for all employees

Define core competency standards

Assure ongoing process for continuous improvement

Communications

Define clearly defined goals and expectations

Sponsor continuous sharing of best practices

Capitalize on streamlined information systems

Real time reporting as events occur

Safe production as a daily message

Posture safety as a core value

Internal publications

Annual report

Regulatory arena (MSHA/OSHA)

Public forums

Address safety as an agenda item for all meetings

Measurement

Establish upstream factors to assess performance

Near misses

Safety meetings

Process audits

Behavioral observations

Inspection of physical conditions “Safety Blitz” incorporating process

safety

Focus on activities that demonstrate employee involvement

Ownership

Ensure safety process is driven by operations management

Establish line management responsibility and accountability

Ensure safety reporting structure is at the appropriate level

Incorporate wellness as a cost avoidance strategy

Extend safety process to incorporate family issues

Sponsor annual skills development safety conference