Press Release

PUC Audit Shows PECO Could Achieve up to $6.6 Million Annually

Published on 8/30/2007

Filed under: Electric

HARRISBURG –According to an audit report released today by the Pennsylvania Public Utility Commission (PUC), PECO Energy Co. may realize yearly savings up to $6.6 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 Stratified Management and Operations Audit analyzed and evaluated management performance in 22 areas.  The audit was conducted by the consulting firm Shumaker and Co. Inc. on behalf of the Commission.

The audit makes 53 recommendations to the companies for improvement. The company’s implementation plan accepted 51 of the recommendations and partially accepted one recommendation while rejecting one recommendation.

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

• Evaluating the annual overtime charges for reasonableness and determine if its is an efficient use of resources;
• Proactively assess hiring needs to address the potential attrition of experienced field operations employees over the course of the next several years and enhance the staff planning documentation to provide a more comprehensive and detailed analysis of projected attrition and hiring needs;
• Increase vegetation management funding 10 to 20 percent over 2005 levels to address the increased number of tree-related service interruptions;
• Reduce the need for corrective maintenance expenditures;
• Perform a detailed analysis of the relationship of Customer Average Interruption Duration Index performance to the number of events per day and determine if more specific targets should be established;
• Develop a formal PECO program to periodically and systematically evaluate use of shared services within the Exelon organization versus use of outsourcing options;
• Implement formal quality-assurance activities for major projects;
• Reduce the backlog in energy-theft caseload;
• Implement measures to significantly improve the effectiveness of the gas-energy theft of service program; and
• Conduct appropriate reviews of the programs impacting PECO diversity and focus efforts in order to be successful in meeting the company’s diversity goals.

The company rejected the recommendation to organize all primary financial functions, specifically accounts payable and payroll, under Exelon’s financial organization.

The company reports that they have already implemented seven of the recommendations and plans to complete implementation of a majority of the remaining recommendations by the end of 2008. The Commission 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 public meetings, or more information about the PUC, visit our Internet homepage www.puc.state.pa.us.

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Docket No. D-05MGT048

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