Deluzio Pushes PA Utilities for More Transparency, Accountability Over Electricity Costs

CARNEGIE, PA – Yesterday, Congressman Chris Deluzio (PA-17) sent a letter to the Bureau of Audits, a division of the Pennsylvania Public Utility Commission, requesting information about an independent audit of the agency. The letter is the latest in Deluzio's ongoing response to April’s widespread power outages and is part of his work to get utility companies and state and local governments to do better by people in the future. It comes amid rising energy costs that continue to hammer Pennsylvanians’ wallets and frustration about low power reliability around severe storms.

“Pennsylvanians should not be forced to accept week-long blackouts as normal when storms roll through. I see it as my role as a member of House Committee on Transportation and Infrastructure to always fight for the strongest, best infrastructure possible for the people of Pennsylvania’s 17th Congressional District,” wrote Congressman Deluzio in the letter. “A fuller understanding of the PUC’s audits and work will help as I continue to push utilities and governments to improve storm readiness and response.” 

Congressman Deluzio’s letter to the Bureau of Audits is his latest move in his follow-up to this spring’s extensive power outages. He sent the letter in response to a constituent’s survey response. To date, the Congressman has deployed a public survey in May that received over 1,200 responses, released the results of that survey in a June report, met this week with International Brotherhood of Electrical Workers (IBEW) Local 29 members to hear their ideas for better storm recovery. He will continue to work with stakeholders toward solutions.  

Congressman Deluzio will keep bringing these stakeholders together to discuss ways to strengthen the electrical grid and lower energy costs for Western Pennsylvanians. 

The full text of the letter is available here and below. 

LETTER TEXT 

Mr. Christian Yother 
Director 
Pennsylvania Bureau of Audits 
Pennsylvania Public Utility Commission  
Third Floor East 
Commonwealth Keystone Building 
400 North Street 
Harrisburg, Pennsylvania 17120  

Dear Director Yother,

In late April, my district experienced a powerful storm with high winds. Some utility electrical equipment was destroyed, and many of my constituents in Western Pennsylvania were left without power for days (some for a week or more). After our local responders and electrical workers successfully restored power, I reached out to my constituents and asked about their experiences—what they faced, what worked, what did not work, and anything else they wanted to convey. I received over 1,200 responses detailing their experiences and thoughts on possible solutions to prevent such lengthy outages in the future and improve recovery.

One constituent raised the idea that the reason for the damage and inconvenience was the lack of internal controls to protect assets and incentives in the public utility industry management system.  

As you know, with the public utilities in Pennsylvania, profits are generally derived from the size of the utility's rate base. There is no profit in the maintenance and repairs of assets, so if powerlines or other equipment are reparably damaged, the utility company will pay to have this fixed. However, because this is part of basic upkeep, they usually can’t charge customers extra for these repaired lines. Storm damage presents an opportunity to replace infrastructure with newer, more expensive equipment. This is considered “capital spending”, expanding the rate base, allowing them to charge more to customers, thereby increasing profits.   

The arrangement the Pennsylvania Public Utility Commission (PUC) has with public utilities is similar to a cost–plus–percentage–of–cost type of contracting. The focus is on spending on infrastructure rather than on good performance. 

My constituent also identified required audits per Pennsylvania Constitution, ARTICLE VIII.  § 10.  Audit. (1968); § 10. Audit. 

The financial affairs of any entity funded or financially aided by the Commonwealth, and all departments, boards, commissions, agencies, instrumentalities, authorities and institutions of the Commonwealth, shall be subject to audits made in accordance with generally accepted auditing standards.  

The website for the Pennsylvania PUC states that “the Bureau of Audits is responsible for the conduct of audit activity of Pennsylvania fixed utilities, including Adjustment Clause Audits, Financial Audits and Management Audits and Management Efficiency Investigations.”  

The purpose of a regular audit is to prevent, detect, and reduce any waste, fraud, abuse, and mismanagement to protect taxpayers and utility rate payers. With rising utility costs as a leading financial burden for many of my constituents and those throughout the Commonwealth, we need to be certain utility companies are providing these services with the utmost efficiency.  

I would appreciate a timely response to the following questions about utility performance and cost:

1. Is the Pennsylvania Bureau of Audits the appropriate entity to conduct independent performance and financial audits of the Pennsylvania PUC? If not, who is? 
2. When was the last independent audit conducted to assess the internal controls over operations, reporting, compliance, and performance of the Pennsylvania PUC? What about financial audits of large gas and electric utilities? 
3. When is the next scheduled audit of the PUC for the same purposes? Internal or external?
4. What findings has your office gathered from any past audits, what corrections have been made, and what recommendations have you made to increase utility efficiency and decrease the costs of delivery? 
5. Are there any actions you recommend Congress take at the federal level to decrease utility costs for Western Pennsylvanians?  

Pennsylvanians should not be forced to accept week-long blackouts as normal when storms roll through. I see it as my role as a member of House Committee on Transportation and Infrastructure to always fight for the strongest, best infrastructure possible for the people of Pennsylvania’s 17th Congressional District. A fuller understanding of the PUC’s audits and work will help as I continue to consider federal policy options to achieve this goal. 

Thank you for your attention to this matter, and I look forward to your response.  

Very respectfully, 
 
Chris Deluzio 
Member of Congress

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