Press Release

PUC Issues Management Audit and Implementation Plan for FirstEnergy Pennsylvania Companies

Published on 6/16/2022

Filed under: Electric

Audit Examines Management & Operations at Met-Ed, Penn Power, West Penn Power & Penelec; Includes 27 Recommendations for Improvements

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released the results of a detailed Management and Operations Audit of the FirstEnergy Pennsylvania Companies. 

The review examined key functional areas at FirstEnergy’s four electric distribution companies in Pennsylvania, including the Metropolitan Edison Company (Met-Ed), Pennsylvania Electric Company (Penelec), Pennsylvania Power Company (Penn Power), and West Penn Power Company (West Penn Power), which serve approximately 2 million customers across Pennsylvania.

In addition to examining the management and operations of FirstEnergy utilities in Pennsylvania, the PUC audit also includes an examination of company ethics and corporate culture as a key matter.

The Commission voted 3-0 today to release the FirstEnergy Audit Report, along with the Implementation Plan that was submitted by FirstEnergy to address recommendations that are detailed in the report. 

The PUC’s FirstEnergy audit report contains 27 recommendations for improvement, including:

• Cooperate fully with all ongoing investigations and implement all approved recommendations for remediation.
• Carefully track and document ongoing activities related to the investigations and litigation to minimize negative impacts to ratepayers.
• Maintain transparent records of the additional costs incurred as a result of the investigations and fallout related to bribery charges in Ohio to demonstrate prudent and reasonable operating costs in any future rate case proceeding.
• Develop and implement approved enhancements to the Compliance Program, implement appropriate testing criterion for testing the key controls to strengthen FirstEnergy’s internal control environment and ultimately resolve the noted material weakness in internal control over financial reporting.
• Improve electric reliability performance by implementing remedial programs that will effectively address the top outage causes.

The audit report details potential annual cost savings of approximately $39 million and one-time cost savings within the range of $13.5 million to $22.5 million.  The implementation plan submitted by FirstEnergy accepts 17 of the PUC’s recommendations and partially accepts eight more recommendations. 

About the PUC

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 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 No.: D-2020-3023106

Contact:

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