Press Release

PUC Issues Audit Recommendations to Duquesne Light Co.

Published on 3/14/2013

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released a report on the Focused Management and Operations Audit of Duquesne Light Co. that contained recommendations that could save the company about $2.4 million annually.

The Commission voted 5-0 to make the audit report and the company’s Implementation Plan public. The Focused Management and Operations Audit analyzed and evaluated management performance in seven functional areas.  The audit was conducted by the PUC’s Bureau of Audits.

The audit report makes 10 recommendations to the company for improvements.  In their Implementation Plan, the company indicated agreement with all 10 recommendations.  The audit recommendations include:

• Conducting a staffing study to analyze the costs and benefits of reducing overtime through various practices such as adjusting levels of shift work, relocating personnel between districts, hiring additional craft workers, and/or using more outside contractor hours;
• Expanding the databases used to track and monitor third-party damage and claims to include all pertinent information regarding types of damages, names of parties, invoiced amounts, settled amounts, and settlement reasons in order to better identify the causes of and control third party damage;
• Enhancing current measures to reduce residential customer arrearages;
• Submitting a detailed, written explanation for each dividend payout exceeding 85 percent of net income to the Commission, and ensuring that advance notice and explanations are submitted to the Commission prior to making future dividend payments in excess of 85 percent of net income;
• Rotating the external audit firm on a periodic basis or, at a minimum, ensuring the external audit firm has established a policy to periodically assure rotation of its audit manager and audit teams.
• Examining the overall management structure of Duquesne Light periodically and adjusting reporting relationships, where appropriate, to eliminate unjustified low or high spans of control; and
• Conducting periodic internal audits of the entire cost allocation process.

Duquesne Light reports that two of the recommendations will be implemented by the end of the second quarter of 2013, three by the end of the third quarter of 2013, and the remaining five recommendations by the end of the fourth quarter of 2013.

Duquesne Light provides electric service to 580,360 customers in parts of Allegheny, Beaver, and Westmoreland counties.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner. For recent news releases, video and audio of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov.

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Docket No. D-2011-2269361

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