Press Release

PUC Efficiency Investigation Shows Peoples Natural Gas Co. Has Realized Annual Savings of $11.1 Million, Could Save Additional $135,000 Per Year

Published on 4/3/2014

Filed under: Gas

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), Peoples Natural Gas Co. (Peoples) realized huge savings after implementing six of the 15 prior audit recommendations reviewed from a Focused Management and Operations Audit report released in March 2010.

The Commission voted 5-0 to make the audit report and the company’s Implementation Plan public. PUC Chairman Robert F. Powelson acknowledged the improvements Peoples has made to its overall operations in a statement.

A recent Management Efficiency Investigation (MEI) was conducted to review and evaluate the effectiveness of Peoples’ efforts to implement 15 of the 22 original recommendations contained in the Focused Management and Operations Audit report released in March 2010.

Of those 15, six were found to have been effectively or substantially implemented, and the company has taken some action on the remaining nine. Among the more notable improvements achieved by Peoples are:

• Implemented programs to identify and reduce major causal factors of unaccounted for gas, resulting in realized average annual savings of approximately $11.1 million in avoided purchased gas costs by reducing its unaccounted for gas levels;
• Reduced the number of Class 1 and Class 2 leaks along with the backlog of Class 2 leaks since 2009;
• Revised the organizational structure of the Company and significantly increased staffing levels subsequent to being acquired in February 2010 by PNG Companies LLC, a subsidiary of SteelRiver; and
• Reviewed and updated its Emergency Response Plan to include all local emergency service contact information and instructions for mass notifications of customers during emergency situations. 

The audit report also identified 11 follow-up recommendations for additional improvements, including:

• Continue to perform annual manpower planning studies to properly assess the adequacy of ongoing staffing levels, and to hire and train Gas Operations field employees;
• Implement measures to reduce excessive individual overtime by hiring additional employees and/or contractor(s), and continue negotiating union contract changes regarding callout policies;
• Accelerate replacement rates of unprotected bare steel mains and services to conform to the Company’s approved current Long Term Infrastructure Improvement Plan;
• Complete efforts to expand segmentation studies to further determine root causes of unaccounted for gas;
• Strive to reduce Company-at-fault damages by continually enhancing training for line marking employees and updating its mapping; and
• Evaluate the benefits of utilizing shift changes or stand-by schedules to reduce response times after normal business hours and any dispatches taking longer than 15 minutes.

Peoples provides natural gas service to approximately 330,000 residential, 27,700 commercial and 180 industrial customers in Pennsylvania.

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Docket No. D-2012-2328651

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