Press Release

PUC Efficiency Investigation Shows Duquesne Light Co. Realized Approximately $136,000 in Annual Savings, Could Save up to an Additional $1.5 Million Annually

Published on 10/1/2015

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released a report on its Management Efficiency Investigation (MEI) of Duquesne Light Company (Duquesne Light), evaluating the implementation of 10 prior PUC recommendations from a 2013 Focused Management and Operations Audit.

The Commissioners voted 4-0 to make the report and the company’s Implementation Plan public. The MEI report notes that Duquesne Light has effectively or substantially implemented nine of 10 prior recommendations, and has taken some action on the remaining recommendation. Among the notable improvements highlighted by the report, the Company:

• Established a procedure in which it requires the external auditor to present its staff rotation policy to Duquesne Light’s Audit Committee for review and approval on an annual basis;
• Completed an assessment of its management structure and spans of control, and adjusted reporting relationships, where appropriate, to eliminate unjustified low or high spans of control;
• Provided a detailed written explanation within 30 days of the public release of the Management Audit report for dividend payments that exceeded 85 percent of net income in 2010 and 2011, and indicated that it would provide advance notice and explanation to the Commission for future annual dividend payments which exceed 85 percent of net income;
• Initiated an internal audit of its cost allocation process in March 2015;
• Developed a cost allocation manual that follows National Association of Regulatory Utility Commissioners guidelines;
• Completed a comprehensive staffing study and identified the major drivers for overtime;
• Improved its database to actively track and monitor third-party damages and claims;
• Reduced overall customer arrearages resulting in annual interest expense savings of approximately $136,000; and
• Improved its average response time to residential consumer complaints and payment agreement requests (PARs) in 2013.

In addition, staff from the PUC’s Bureau of Audits made four follow-up recommendations for further improvement, including the following:

• Identify all options for ensuring proper staffing levels for field operations craft workers while additionally striving to limit the number of employees working excessive amounts of overtime, potentially yielding annual savings up to $1.5 million;
• Create new and/or modify existing safety programs and awareness efforts in order to meet the internally established Occupational Safety and Health Administration goals;
• Establish goals for collection agency performance based upon the percentage of net dollars collected; and
• Include all local emergency service and PUC contacts in the Emergency Operations Plan and update at least annually.

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 and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility.  “Like” Pennsylvania Public Utility Commission on Facebook for easy access to information on utility issues.

# # #

Docket No. D-2015-2462108

 

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov