Press Release

PUC Audit Makes Management Recommendations to PAWC

Published on 3/17/2016

Filed under: Water and Wastewater

HARRISBURG –The Pennsylvania Public Utility Commission (PUC) today released a report on the Focused Management and Operations Audit of Pennsylvania American Water Company (PAWC) that could provide a combined estimated annual cost savings of approximately $3.6 million and a one-time savings of approximately $2.1 million.

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 12 functional areas. The audit was conducted by the PUC’s Bureau of Audits.

The Audit Report makes 38 recommendations to PAWC for improvement. PAWC indicated acceptance of 29, partial acceptance of eight recommendations and rejection of one recommendation in its Implementation Plan. Some of the more notable recommendations include:

• Take measures to strengthen the corporate culture;
• Reduce non-revenue water levels and strive to improve the Infrastructure Leakage Index;
• Increase main replacement rates to standard industry levels for all operating districts;
• Correct pipeline locational accuracies and incorporate key pipeline data into the geographic information system;
• Develop a comprehensive damage prevention program;
• Identify the size and criticality of all valves, and operate valves in accordance with corporate policies and procedures;
• Fully optimize the materials management system;
• Improve the testing and oversight of the affiliate transactions throughout the organization, and explore the possibility of assigning a PAWC employee the responsibility to actively oversee the company’s affiliated transactions;
• Establish a centralized materials management organizational structure and a training program for employees handling materials;
• Create a formal cybersecurity awareness and training program that tracks employees’ participation to ensure that employees maintain a cyber-safe work environment;
• Work with American Water Works Service Company to improve the amount of detail provided in intercompany invoices and reports;
• Develop a policy governing the use of facility needs assessments, space-planning studies and energy usage audits to periodically access the condition and efficiency of Company facilities; and
• Dedicate additional resources to fleet management.

The company’s Implementation Plan indicates that the majority of all accepted recommendations will be implemented by June 2017.

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” PA Public Utility Commission” on Facebook for easy access to information on electric shopping.

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Docket No.    D-2014-2430603

Contact:

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