Press Release

PUC Announces Management Audits, Efficiency Investigations with Potential Savings of Up to $9.7 Million Annually, $3.3 Million in One –Time Savings for Utilities in FY 2008-09

Published on 10/22/2009

Filed under: Electric Gas Water and Wastewater Telecommunications

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released a 2008-09 annual report on management audits (MAs) and management efficiency investigations (MEIs) that showed that the PUC has helped utilities save millions of dollars through voluntary improvements to operations, service reliability and safety by regulated utility companies.

The Commission voted 5-0 to make the annual report public.

In Fiscal Year 2008-09, the PUC Bureau of Audits conducted MAs of Pennsylvania American Water Co. (PAWC), Philadelphia Gas Works (PGW), T.W. Phillips Gas and Oil Co. (T.W. Phillips), and The York Water Co. (York Water). These audits resulted in 248 improvement opportunities with 245 of the recommendations being accepted or partially accepted by the companies in their implementation plans.

The quantifiable recurring annual benefits from implementing the recommendations in the four MAs could save the utilities up to $9.6 million.  The potential benefits mainly can be attributed to recommendations for PGW.  It was estimated that PGW could save up to $4 million by undertaking a major study to improve its gas theft prevention program, and up to $2 million by reevaluating its use of the soft-off shutoff program, whereby technicians are not dispatched to shut off the gas to the premises of customers who discontinue service but instead the gas usage is monitored. 

The quantifiable one-time savings from implementing recommendations in the four MAs could save the utilities up to $3 million.  The potential savings primarily are associated with PGW reducing the level of inventory in its storerooms, valued at up to $2 million.

Staff also conducted MEIs of Columbia Water Co. (Columbia Water), UGI Utilities Inc. (UGI) and UGI Penn Natural Gas Inc. (UGI-PNG).  The MEIs showed that 15 of the 32 total recommendations from prior MAs were effectively implemented and that the companies also had taken some action on all of the 17 remaining recommendations. The findings show that UGI/UGI-PNG are realizing annual savings of $489,000, primarily related to its call center consolidation and reduced staffing levels, revitalization of its theft of service program, reductions in lost time incidents and reductions in substation inventory levels. 

A total of 24 follow-up recommendations were made, with the companies accepting or partially accepting all of them.  More specific information on each of the original audits and investigations can be found at the Commission’s website at www.puc.state.pa.us under press releases.

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 website at www.puc.state.pa.us.

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Docket No. D-2009-2128171

Contact:

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