Press Release

PUC Audit Shows West Penn Power Co. Could Achieve up to $8.8 Million Annually

Published on 2/14/2008

Filed under: Electric

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), West Penn Power Company may realize yearly savings up to $8.4 million and one-time savings of $371,000 by implementing recommendations contained in the audit.

The Commission voted 4-0 to make the audit report and the company’s implementation plan public.  The Focused Management and Operations Audit analyzed and evaluated management performance in eight areas.  The audit was conducted by PUC’s Bureau of Audits Staff.

The audit makes 21 recommendations to the company for improvement.  The company’s implementation plan accepted 16 of the recommendations and partially accepted one recommendation, while rejecting four recommendations.

The audit recommendations accepted in full or in part by the company include:

• Develop an improvement plan to ensure that the Commission’s rolling three-year standards for CAIDI and SAIDI are met.
• Sufficiently staff the lineman positions in all districts and conduct a study to determine best utilization practices for contractors and company linemen for projects beyond core workload.
• Effectively track and enforce the underground damage prevention program, develop appropriate line marking procedures for the construction, operations and maintenance manual, investigate causes of incorrectly located lines, and bill the appropriate party for all non-company caused hits.
• Charge its affiliate pole attachment fees consistent with the rates charged to non-affiliates
• Accurately account for recoveries on finaled accounts; and
• Intensify efforts toward attaining full representation of women and minorities.

West Penn rejected recommendations to: limit its dividend payments to its parent Allegheny Energy, achieve returns on finaled customer accounts equivalent to affiliates in other states, reorganize the reporting relationship of the internal audit function, and to periodically change its independent accounting firm.

The company reports they have already implemented seven of the recommendations and plans to complete implementation of the remaining recommendations by Feb. 1, 2009.  The Commission will conduct a follow-up on the company’s implementation efforts during a future Management Efficiency Investigation.  

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner.

For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our Web site at www.puc.state.pa.us.

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Docket No. D-06MGT018

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov