Press Release

PUC Management Efficiency Investigation Shows West Penn Power Co. Could Realize an Additional $1.3 Million in Annual Savings

Published on 8/25/2011

Filed under: Electric

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), West Penn Power Co. could save up to $1.3 million annually by implementing the recommendations contained in the report.  These savings are in addition to improved efficiency and effectiveness the company has already realized by implementing recommendations from a Stratified Management and Operations Audit report released by the Commission in January 2008.

The Commission voted 5-0 to approve the motion by Commissioner James H. Cawley to make the report public and include annual filings by the company that analyzes overtime hours specifically for linemen. The PUC Bureau of Audits’ Management Efficiency Investigation (MEI) examined the company’s progress in implementing 14 of the 21 original recommendations from the prior management audit report and its emergency preparedness efforts.  

According to the MEI, West Penn Power has effectively implemented 12 of the 14 prior recommendations reviewed and taken some action on both of the remaining recommendations.  Some of the changes made by the company include: 

• Reduced the Customer Average Interruption Duration Index and System Average Interruption Duration Index reliability indices to levels that are better than the company’s rolling three-year standards;
• Greatly reduced the number of repeating worst performing circuits;
• Developed a prioritization matrix to rank all capital projects accordingly;
• Implemented software to track and monitor capital spending;
• Began to bill pole rental fees for affiliated and non-affiliated customers in a timely fashion;
• Began to track outside collection agency success by electric distribution company instead of Allegheny Power as a whole (i.e., West Penn and two affiliated electric distribution companies);
• Have maintained reasonable outside collection agency success;
• Began to properly track its pole inspections; and
• Made changes to the Annual Diversity Report to meet PUC guidelines.

In addition, the Commission made three recommendations for further improvement, which the company accepted in its Implementation Plan.  The recommendations include to:

• Properly staff the field operation employees at each service center to address excessive overtime. Placing linemen on different shifts and/or hiring additional linemen to reduce overtime hours could result in net annual savings of approximately $1.3 million.
• Continue to evaluate the feasibility of a plan to replace porcelain cutouts that serve the highest number of customers to reduce the number of customer interruptions due to porcelain cutout failures.
• File all affiliated interest agreements with the Commission for any transactions with new affiliates moving forward as needed.

The company indicated that implementation of two of the recommendations is ongoing and that it plans to initiate implementation of the other follow-up recommendation by December 2011.

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-2010-2183001

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