Press Release

PUC Audit Shows state’s FirstEnergy Companies Could Achieve up to $33.7 Million in Annual, One-Time Savings

Published on 3/1/2007

Filed under: Electric

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), the state’s FirstEnergy companies may realize yearly savings up to $28.8 million and one-time savings up to $4.9 million by implementing recommendations contained in the audit.

The Commission voted 4-0 to make the audit report and the companies’ implementation plan public.  Vice Chairman James Cawley issued a statement.  In Pennsylvania, FirstEnergy operates Metropolitan-Edison Co., Pennsylvania Electric Co. and Pennsylvania Power Co. The Stratified Management and Operations Audit analyzed and evaluated management performance in 11 areas.   

The audit makes 50 recommendations to the companies for improvement. The companies’ implementation plan accepted 37 of the recommendations and part of five other recommendations while rejecting eight of the recommendations.

The audit recommendations accepted or partially accepted by the companies include:

• Developing a detailed plan to improve distribution system reliability and meet its System Average Interruption Duration Index (SAIDI) goals;
• Listing and describing remedial actions planned or taken for any circuit that appears on the list of 5 percent worst performing circuits for one year or more, or in four out of six quarters as a supplement to the existing quarterly reports provided to the Commission;
• Conducting a more useful staffing study;
• Appointing the president of Pennsylvania Operations to the company’s Operational Leadership Council and to the respective Boards of the three Pennsylvania regulated utilities; 
• Submitting affiliate transaction contracts for Commission approval for transactions with affiliates in accordance with the Public Utility Code for all FirstEnergy companies in Pennsylvania;
• Accelerating the efforts to bring Pennsylvania customer service levels up to and costs down to the FirstEnergy Ohio companies’ levels;
• Improving customer call center performance in order to achieve the goal set in the Pennsylvania Reliability Settlement Agreement;
• Reducing charge-offs and non-pay disconnects and reconnects;
• Developing a plan and schedule for the implementation of the Collections System.
• Taking steps to further reduce meter reading costs and develop a plan and schedule for the implementation of automatic meter reading if determined to be cost justified; and
• Examining the level of overtime being paid as it relates to ensuring adequate staffing levels.

The recommendations rejected by the company concerned corporate governance, proactive efforts related to reoccurring shareholder proposals, affiliate activities, and estimated customer bills. The Commission’s Bureau of Audits will conduct a follow-up on the companies’ implementation efforts during a future Management Efficiency Investigation.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner. For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our Web site at www.puc.state.pa.us.

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Docket No. D-05MGT003

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