Press Release

PUC Efficiency Investigation Shows UGI Utilities Inc. and UGI Penn Natural Gas Inc. Could Save Up to $1.8 Million Annually

Published on 10/9/2008

Filed under: Electric Gas

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), UGI Utilities Inc. (UGI) and UGI Penn Natural Gas Inc. (UGI Penn) could realize combined yearly savings up to $1.8 million and one-time savings of up to $240,000 by implementing the recommendations contained in the report.

The Commission voted 5-0 to approve the release of the report and a motion by Vice Chairman Tyrone J. Christy directing Commission staff to open a docketed, non-prosecutory investigation to review the Commission’s jurisdiction over propane distribution systems. 

UGI Penn, the former PG Energy company, is now owned by UGI but operated separately.  The PUC Bureau of Audits’ Management Efficiency Investigation (MEI) examined UGI’s progress in implementing 20 of the 23 original recommendations from a February 2005 Focused Management and Operations Audit, the companies’ compliance with the order approving the acquisition of PG Energy, and their emergency preparedness. 

The auditors found that UGI effectively implemented 10 of the 20 prior recommendations reviewed and has taken some action on the 10 remaining recommendations resulting in realized annual savings of approximately $489,000 and one-time savings of $48,000.  Some of the changes made by the companies included:

• Initiating efforts to fully deploy automated meter reading devices to both gas and electric customers;
• Revitalization of its theft of service program;
• Reducing call center staffing requirements;
• Eliminating substation inventory; and
• Providing justification to the Commission for gas beyond the mains systems that have been served with propane for more than five years.

Additionally, the audit report contained 15 follow-up recommendations for improvement, which the companies accepted.  The Commission directed the companies to proceed with their plans to implement the follow-up recommendations.  The additional recommendations identified quantifiable potential annual cost savings of approximately $1.8 million and a one-time savings estimated at $240,000. 

The follow-up recommendations accepted by the companies include:

• Initiating steps to remove long-term individual customers from the gas beyond the main program;
• Completing full deployment of automated meter reading devices;
• Replacing defective cutouts in order to reduce electric outages due to equipment failure;
• Fully complying with recently established tree trimming cycle standards that prescribe a four to eight-year trimming cycle;
• Striving to improve safety performance and consistently meet Electric Division safety goals;
• Completing a feasibility study to determine whether additional consolidation of call centers is appropriate;
• Annually reviewing and updating certain emergency response and physical security plans as appropriate; and
• UGI Penn taking corrective actions in order to improve quality of service performance and achieve the benchmark levels not currently being met, regularly monitoring ongoing service quality, and as necessary taking action to correct an deficiencies that occur.

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.

# # #

Docket No. D-07MEI005

Contact:

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