Press Release

PUC Audit Makes Management Recommendations for Duquesne Light

Published on 11/19/2010

Filed under: Electric

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC); Duquesne Light Co. could realize up to $186,000 in additional savings by implementing the recommendations contained in the report. 

These savings are in addition to the $9.5 million annual and $1.2 million one-time savings that the company has already realized by implementing recommendations from a Focused Management and Operations Audit report released in May 2006.

The Commission voted 5-0 to make the audit report and the company’s implementation plan public.  The PUC Bureau of Audits’ Management Efficiency Investigation examined Duquesne’s progress in implementing 10 of the 15 original recommendations from the prior management audit. 

         The auditors found that Duquesne effectively implemented all 10 of the prior recommendations reviewed.  Among the more notable improvements achieved by the company are:

• Implementing a succession planning process for senior management and management positions;
• Filing and receiving commission approval of all required affiliated interest agreements;
• Establishing procedures requiring documentation of Duquesne Light’s Board of Directors’ approval for all inter-company loans and amendments;
• Significantly reducing its amount of accounts receivable write-offs resulting in an average annual savings of about $9.4 million;
• Reducing long-term residential arrearages resulting in an average annual savings of $59,000;
• Significantly reducing its justified payment arrangement request rate;
• Reducing response times to consumer complaints; and
• Conducting regular reviews of inactive inventory to identify, write off and dispose of obsolete inventory resulting in one-time savings of $1.2 million and annual savings of $117,400.

Additionally, the Audit Staff made recommendations for further improvement such as increased collection agency recovery rates for closed customer accounts that could increase its annual cash flow by about $186,000 and further reductions to the average response time to payment arrangement requests.

Duquesne provides electric service to about 586,807 customers in Allegheny and Beaver counties.

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-2009-2083182

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