PUC Audit Shows PPL Electric Could Achieve Savings of up to $1.9 Million Annually

July 23, 2009

HARRISBURG – According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), PPL Electric Utilities Corp. (PPL) may realize yearly savings up to $1.9 million and one-time savings of $9.8 million by implementing recommendations contained in the audit.

The Commission voted 5-0 to make the audit report and the company’s implementation plan public.  The Focused Management and Operations Audit analyzed and evaluated management performance in 12 areas.  The audit was conducted by the PUC’s Bureau of Audits Staff.

The audit makes 23 recommendations to the company for improvement.  The company’s implementation plan accepted all 23 of the recommendations.

The audit recommendations accepted in full or in part by the company include:

Reevaluate the feasibility of the current distribution line inspection program and consider expanding foot patrols to regions, circuits or areas that may benefit from a more aggressive approach based on a cost/benefit analysis;

Strive to reduce the number of outages caused by equipment failure and non-trimming related tree outages in order to improve reliability indices;

Develop a risk management program to effectively identify, assess and mitigate cyber risk to its Information Systems Infrastructure;

Improve inventory cycle count accuracy, strive to optimize inventory levels, and increase turnover to at least 3.0;

Submit for Commission review and approval an updated contract or agreement for each affiliate that PPL Electric Utilities receives services from or provides services to, which should include information regarding the services to be received or performed and a description of the cost-allocation methodology that will be applied;

Complete efforts to develop, document and implement an effective ongoing succession plan for all PPL executives’ management positions. 

PPL notes that they have already implemented two recommendations and plan to complete implementation of the remaining recommendations by the first quarter of 2011.  The Commission will conduct a follow-up on the company’s implementation efforts during a future Management Efficiency Investigation, which should commence during the second half of 2011. 

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 website at www.puc.state.pa.us.

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Docket Number D-2009-2102172