Press Release

PUC Makes Management Recommendations to UGI Utilities, Inc.; Releases Audit and Implementation Plan

Published on 11/14/2019

Filed under: Gas

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) has released a Management and Operations Audit Report of UGI Utilities, Inc. (UGI or UGI Utilities) that could provide a combined estimated annual savings of approximately $336,000 to $713,000 and one-time savings of approximately $3.360 million to $7.130 million.

The Commission voted 5-0 to make the Audit Report and the Implementation Plan public. PUC Commissioner Andrew G. Place issued a statement. The audit report makes 45 recommendations to the company for improvement.  UGI indicated acceptance of 42 recommendations, partial acceptance of one recommendation and rejection of two recommendations in their implementation plan. Some of the more notable recommendations include:

• Improve the maintenance and tracking of safety through automation.
• Revise UGI Utilities’ delegation of authority policy to strengthen governance controls for the new Executive Vice President Natural Gas position.
• Create a periodic, recurring process to compare the initial cost of services provided between UGI Utilities and its affiliates to market rates.
• Conduct periodic internal audits of affiliate transactions and shared service costs.
• Continue to reduce the number of third-party damages to pipelines resulting from digging operations and increase the damage collection rate at UGI North.
• Maintain focus on safety with the objective of meeting or exceeding key performance goals.
• Establish and track response times by subcategories and take corrective action to continue improving response times for emergency outage calls.
• Establish physical security standards that apply at company facilities and devote resources to adequately maintain oversight.
• Update the Physical Security Plan to include relevant physical security efforts and review, update, and test it annually.
• Perform penetration tests, risk analysis, and vulnerability assessments of physical security routinely, and periodically utilize external/independent resources.
• Improve company-wide inventory turnover and exclude emergency stock from inventory turnover calculations.
• Reduce long-term accounts receivable balances.
• Improve customer service performance metrics.

UGI rejected the following two recommendations:

• Organize the Internal Audit function to report administratively to the UGI Corp. CEO, another non-financial senior officer of UGI Corp., or directly to the Board of Directors.
• Amend or file new affiliated interest agreements to more accurately detail services provided.

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.

Visit the PUC’s website at www.puc.pa.gov for recent news releases and video of select proceedings. You can also follow us on Twitter, Facebook, LinkedIn, Instagram and YouTube. Search for the “Pennsylvania Public Utility Commission” or “PA PUC” on your favorite social media channel for updates on utility issues and other helpful consumer information.

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Docket Nos.
D-2018-3002234
D-2018-3002235
D-2018-3002236

Contact:

• Nils Hagen-Frederiksen
  Press Secretary
  717-418-2701
  nhagen-fre@pa.gov