Press Release

PUC Efficiency Investigation shows Peoples Natural Gas-Equitable Division has realized annual savings of $14.9 million

Published on 4/23/2014

Filed under: Gas

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), Peoples Natural Gas-Equitable Division had implemented ten of the 18 prior audit recommendations reviewed from a Focused Management and Operations Audit report released in June 2010.

The Commission voted 5-0 to make the audit report and the company’s Implementation Plan public. PUC Chairman Robert F. Powelson and Commissioner James H. Cawley issued a joint statement.

The objective of this Management Efficiency Investigation (MEI) was to review and evaluate the effectiveness of Peoples Natural Gas-Equitable Division’s efforts to implement 18 of the 72 original recommendations contained in the Focused Management and Operations Audit report released in June 2010.  Of those 18, ten were found to have been effectively or substantially implemented, and that the company has taken some action on seven of the remaining eight recommendations.  Among the more notable improvements achieved by Peoples Natural Gas-Equitable Division are:

• Developed alternate arrangements for natural gas supply from local Marcellus Shale production which resulted in annual cost savings of approximately $13.3 million.Reduced its unaccounted for gas levels from 5.8% in 2008 to 5.0% in 2012 which resulted in an annual cost savings of approximately $750,000. Began to staff the Gas Control Center with at least two gas controllers per shift. Increased capital spending dedicated to the accelerated replacement of bare steel mains to levels from $16.3 million in 2008 to an annual average of $19.2 million from 2009 to 2012.

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

• Improve and expand damage prevention programs and reduce line hits associated with locator errors.
• Reduce the number of outstanding leaks, especially Class 2 leaks.
• Utilize the newly developed replacement algorithm software for bare steel main replacement planning.

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Docket No. D-2013-2354811

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