Press Release

PUC Announces Management Audits, Investigations Saved Utilities Up to $102 Million in Annual and One-Time Savings Since 2000

Published on 11/10/2005

Filed under: Electric Gas Water and Wastewater Telecommunications Transportation and Safety

    HARRISBURG -- The Pennsylvania Public Utility Commission (PUC) today released a 2004-05 annual report on management audits and management efficiency investigations, noting that, since 2000, the PUC has helped utilities to save up to $102 million (up to $68.5 million in annual or recurring savings and up to $33.8 million in one-time savings) through voluntary improvements to operations, service reliability and safety by regulated utility companies. 

    “Commission audits result in more reliable, safer and reasonably priced service for Pennsylvania utility customers,” said PUC Chairman Wendell F. Holland.  “The improvements we recommend to make that service more reliable, safer and cost-effective are saving our utilities millions and millions of dollars.  These utilities are voluntarily making the improvements that we recommend, and thus authenticate the quality of our recommendations.  These savings help to ensure our consumers receive safe, reliable and reasonably priced utility service, and help to ensure that our utilities remain viable businesses that serve all 12 million Pennsylvanians every day. 

    “At a time when we fear rising energy costs, I am grateful that we have found ways to realize significant savings that inure to the benefit of ratepayers and utilities.”

    The PUC Bureau of Audits conducted management efficiency investigations in 2004-05 (in follow-up to previous management audits) of PECO Energy Company, Pennsylvania American Water Company, Philadelphia Gas Works and West Penn Power.  These utilities are realizing a combined annually recurring savings of up to $26.2 million by implementing previous management audit recommendations, such as an improved theft of service program (PECO); completed energy audits and a nationwide procurement contract with a single automatic meter-reading equipment supplier (PA American); reduced salary and wage increases, reduced absenteeism, reductions in information technology costs and increased inventory turnover (PGW); and improved collection recovery (West Penn).  PGW also realized one-time savings estimated at $26.7 million by implementing a payroll cost-containment program and a reduction in average inventory levels.  The year’s management efficiency investigations also led to additional recommendations, which if followed could lead to another $78.8 million in annual or recurring savings and $22.6 million in one-time savings.

    PUC management audits conducted in 2004-05 revealed that National Fuel Gas Distribution Company-Pennsylvania Division, Newtown Artesian Water Company and UGI Utilities Inc. could achieve up to $422,800 in net annual or recurring benefits and one-time savings of up to $488,600 in 2004-05 by implementing recommendations that involve improving inventory turnover (UGI and Newtown); reducing distribution line hit damages (at NFG); and reducing director compensation (Newtown).

    The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.

    For recent news releases, or more information about the PUC, visit our Internet homepage at www.puc.state.pa.us.

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Docket No. D-05MEI041

Contact:

• Tom Charles
  Director of Communications
  717-787-9504
  thcharles@pa.gov