METROPOLITAN EDISON COMPANY - Pennsylvania Public Utility ...

II. SUMMARY OF MANAGEMENT EFFECTIVENESSAND OPERATING EFFICIENCYThe Audit Staff found that Metropolitan Edison Company (Met-Ed), PennsylvaniaElectric Company (Penelec), and Pennsylvania Power Company (Penn Power)(collectively referred to as the FirstEnergy Pennsylvania Companies or FE-PACompanies) have effectively or substantially implemented 10 of the 26 priorManagement Audit recommendations reviewed. It is noteworthy that all three FE-PACompanies are owned by FirstEnergy Corp. (FirstEnergy), and that they all receive asubstantial amount of support services from FirstEnergy Service Company.The improvements achieved by the management of the FE-PA Companies,FirstEnergy and/or FirstEnergy Service Company include:• Developed a Federal Energy Regulatory Commission (FERC) and RegionalTransmission Organization (RTO) policy department for dealing withtransmission related issues. Moreover, FirstEnergy has been an activeparticipant in PJM’s Planning Committee (PC) and the Regional TransmissionExpansion Planning (RTEP) process.• Improved inventory turnover rates and reduced total inventory levels. Totalinventory levels were reduced by approximately $7.4 million (i.e., $1,839,000at Met-Ed, $5,409,000 at Penelec and $130,000 at Penn Power) resulting inestimated total annual carrying cost savings of $738,000 (i.e., $184,000 forMet-Ed, $541,000 for Penelec and $13,000 for Penn Power).• Developed and implemented reliability improvement plans which have helpedeach of the FE-PA Companies improve their System Average InterruptionFrequency Index (SAIFI) and System Average Interruption Duration Index(SAIDI) performance.• Developed a Work Management Initiative Group to plan, schedule andmanage workload across FirstEnergy’s system and determine current andfuture staffing levels.• Completed its analysis of the FERC account mapping 1 verification processesfor Administrative & General (A&G) accounts, reduced the threshold forreviewing variances in these accounts to $500,000, and conducted an internalaudit of FERC Form 1 report mapping.• Corrected deficiencies identified in its assessment of internal controls overfinancial reporting.• Rerouted meter reader routes that resulted in reduced annual meter readingcosts at Met-Ed and Penn Power by approximately $233,000 and $202,000,respectively.• Significantly reduced the percentage of residential and small business billsnot rendered each billing cycle.1 Process used to transfer data from accounts used for FirstEnergy’s financial and management reportingsystem into the FERC Uniform System of Accounts.- 3 -