Press Release

PUC Issues Management and Operations Audit for Pennsylvania American Water Company

Published on 12/28/2023

Filed under: Water and Wastewater

Audit Examines Management & Operations and Identifies 31 Recommendation for Improvements

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) has released the results of a detailed Management and Operations Audit of the Pennsylvania American Water Company (PAWC), which includes 31 recommendations for improving operations at PAWC.

The review examined key functional areas at PAWC, which serves approximately 679,000 water and 97,000 wastewater customers in 37 counties and is the largest regulated water and wastewater service provider in Pennsylvania.

The Commission voted 5-0 at the PUC’s December 21 public meeting to release the PAWC Audit Report, along with the Implementation Plan that was submitted by PAWC to address recommendations in the report.

Audit Report and Recommendations

The PUC audit report includes recommendations that identify operational and service improvements for PAWC customers, including several significant items:

• Reducing unaccounted-for-water (UFW) below the PUC’s 20% threshold and reporting UFW correctly.
• Reducing line hits to the company’s underground facilities, including damage by PAWC employees and contractors.
• Improving physical security for control rooms and SCADA (Supervisory Control and Data Acquisition) control systems.
• Improving customer service performance to pre-pandemic levels, at a minimum.
• Continuing outreach efforts to payment troubled customers and leveraging low-income resources to help reduce the level of outstanding customer balances.

Additionally, based on a motion from PUC Vice Chair Kimberly Barrow, issues related to the Bureau of Audits repeated recommendations that PAWC file new or amended affiliated interest agreement – which accurately reflects the company structure and intercompany transactions occurring between PAWC and the American Waterworks Service Company – are referred to the PUC’s independent Bureau of Investigation and Enforcement (I&E) for any further action that I&E deems warranted.

In addition to recommendations for enhancing operational issues and customer service, the PUC audit report identified $4 million in one-time savings and approximately $3.1 million in annual savings, which if effectively implemented will yield an overall cost savings for ratepayers.

PAWC’s implementation plan accepts 23 of the recommendations detailed in the PUC audit report and partially agrees with the remaining eight recommendations – indicating that most of the recommendations will be completely implemented by the end of 2024.

The PUC’s audit staff will examine PAWC’s implementation efforts related to the more significant recommendations during the next PUC Management Efficiency Investigation, which is expected to begin early 2026.

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 X (formerly 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-2022-3035217

Contact:

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