Press Release

PUC Audit Management Recommendations to Citizens’ Electric Company, Wellsboro Electric Company, and Valley Energy, Inc.

Published on 4/3/2014

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today released a report on the Focused Management and Operations Audit of Citizens’ Electric Company (Citizens’), Wellsboro Electric Company (Wellsboro) and Valley Energy, Inc. (Valley)  (collectively referred to as the “Companies”). The report contained recommendations that could provide the Companies, wholly owned by C&T Enterprises, Inc. (C&T), an estimated one-time savings of $334,642, in addition to approximately $46,000 annually.

The Commission voted 5-0 to make the audit report and the Companies’ Implementation Plan public. The audit was conducted by the PUC’s Bureau of Audits and analyzed and evaluated management performance in nine functional areas at each of the Companies. The Audit was performed by the PUC’s Bureau of Audit Staff.

The audit report makes 18 recommendations to the Companies for improvement. The Companies’ indicated acceptance of all 18 recommendations in its Implementation Plan. These recommendations include:

• Develop annual inventory turnover rate goals at each of the regulated utilities and strive to improve inventory turnover rates to at least 2.0 turns;
• Perform a review of the C&T call center allocation methodology to determine the most accurate causal relationship to distribute call center fixed costs;
• Perform periodic detailed reviews of the allocation factors used to distribute costs between Citizens’, Wellsboro, Valley, Tri-County and Claverack Rural Electric Cooperatives and among Valley’s operating segments for accuracy;
• Reduce the number of unknown outages to more reasonable levels;
• Investigate the causal factors contributing to negative unaccounted-for-gas levels and take corrective actions, if applicable;
• Establish management succession planning for key management positions;
• Prepare and file annual diversity reports to the Commission according to the 1997 PUC Diversity Filing guidelines, including human resources and procurement efforts; and.
• Develop a written policy requiring the rotation of the managing or engagement partner and lead auditor of the external audit firm at least every five years

The Companies report that all recommendations will be implemented by March 2015.

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.

For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility.  “Like” PAPowerSwitch on Facebook for easy access to information on electric shopping.

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Docket Nos. D-2013-2351140, D-2013-2351242, D-2013-2351244

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