Press Release

PUC Releases Management Efficiency Investigation Report on PECO Energy Company

Published on 3/12/2026

Filed under: Electric Gas

Follow-Up Review Examines Utility’s Progress Implementing Recommendations from 2022 Management and Operations Audit

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released the results of a Management Efficiency Investigation (MEI) examining PECO Energy Company’s progress implementing recommendations from a comprehensive management and operations audit issued by the Commission in 2022, including ongoing concerns related to the company’s customer billing system and operational costs such as employee overtime.

The Commission voted 5-0 to approve the release of the MEI report during its March 12, 2026, public meeting.

“The Commission’s Bureau of Audits plays a critical role in making sure utilities operate efficiently and remain accountable to the customers who depend on them,” PUC Chairman Steve DeFrank noted. “Unfortunately, this investigation highlights serious concerns about PECO’s customer service performance and its customer information system. After the system was implemented in 2024, call wait times rose dramatically — reaching more than 200 seconds compared to a goal of 18 seconds — and some customers experienced delayed or irregular billing. Those outcomes are unacceptable.

“I am also deeply concerned about the excessive overtime identified in this investigation. Employees working extreme hours raises safety concerns and can increase operating costs that ultimately affect ratepayers. PECO must act quickly to address these issues, and the Commission will be watching the company’s progress closely and holding it accountable.”

The investigation, conducted by the PUC’s Bureau of Audits, reviewed the utility’s efforts to improve operational efficiency, reliability, and customer service following the 2022 audit.

The MEI Report, the utility’s response, and the 2022 Management and Operations Audit are available on the PUC website.

Background

PECO, headquartered in Philadelphia, provides electric service to approximately 1.67 million customers and natural gas service to approximately 537,000 customers across seven counties in southeastern Pennsylvania.

In August 2022, the PUC released a comprehensive Management and Operations Audit of PECO that examined key areas of the company’s operations and identified 22 recommendations aimed at improving efficiency and service for customers.

PECO submitted an implementation plan and has provided annual progress reports to the Commission. Based on those filings, the PUC’s Bureau of Audits conducted the current Management Efficiency Investigation to verify the company’s progress.

 
Key Findings

The MEI reviewed PECO’s implementation of 19 recommendations from the original audit across several operational areas, including electric and gas operations, customer service, emergency preparedness, human resources, and cost allocations involving affiliated companies.

The investigation found that PECO has effectively or substantially implemented nine of the recommendations reviewed and has taken action on the remaining recommendations.

Customer Information System (CIS)

Auditors identified ongoing issues related to PECO’s customer information system, including technical problems that have contributed to billing errors, delayed bills, and other customer service challenges affecting some PECO customers.

Given the importance of accurate and timely billing, the MEI recommends continued efforts by PECO to identify and remediate technical issues within the CIS platform, improve system reliability, and strengthen oversight of billing processes.

Employee Overtime and Operational Costs

The MEI also highlights concerns regarding excessive overtime levels for certain employees, which can increase operating costs and ultimately impact customers.

Auditors recommend that PECO evaluate additional strategies to reduce overtime through improved staffing levels, operational planning, and fatigue management, including consideration of establishing maximum allowable overtime thresholds for individual employees.

Other Operational Improvements

The investigation also identified several areas where PECO has made measurable progress since the 2022 audit, including:

• Improved electric reliability performance, with key reliability metrics exceeding PUC benchmarks.
• Reduced outages caused by equipment failures.
• Establishment of a surcharge credit returning revenues from PECO’s fiber assets to distribution ratepayers through the end of 2025.
• New initiatives to retain customer service representatives, helping reduce turnover.
  
  

Additional Opportunities for Improvement

While acknowledging the company’s progress, the MEI identifies additional opportunities to strengthen operations and internal processes.

The report includes 18 follow-up recommendations addressing remaining audit items and several new findings.

These recommendations focus on areas such as:

• Strengthening cost allocation practices between PECO and its affiliates.
• Continuing efforts to reduce outages and infrastructure damage incidents.
• Improving mapping and GPS location of underground gas infrastructure.
• Enhancing safety programs and reducing motor vehicle accidents.

The investigation also reviewed PECO’s compliance with PUC regulations related to physical security, cybersecurity, emergency response, and business continuity planning, identifying several minor issues and recommending corrective actions.

Ongoing Oversight

The PUC’s Bureau of Audits conducts management and operations audits of major utilities to identify opportunities for operational improvements and better service for customers. Follow-up Management Efficiency Investigations are used to verify utilities’ progress in implementing those recommendations.

Additional details about the findings and recommendations are available in the full Management Efficiency Investigation Report released today.

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, 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-2025-3053971

Contact:

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