PUC Issues Management Efficiency Investigation Report for FirstEnergy Pennsylvania Electric Company

PUC Issues Management Efficiency Investigation Report for FirstEnergy Pennsylvania Electric Company

Published on 9/25/2025

Filed under: Electric

Report Tracks Progress Implementing Recommendations Made During a Previous PUC Management and Operations Audit

HARRISBURG - The Pennsylvania Public Utility Commission (PUC) today released a report on a Management Efficiency Investigation (MEI) of FirstEnergy Pennsylvania Electric Company (FE PA), which provides electric distribution service to customers across large portions of Central and Western Pennsylvania.

The Commission voted 5-0 to make the MEI report public, along with the publication of an implementation plan submitted by FE PA.

This most recent investigation focuses on FE PA's progress in implementing 15 of the 27 original recommendations made as part of a 2022 PUC Management and Operations Audit, along with a review of the company's compliance with PUC regulations regarding physical security, cybersecurity, emergency response, and business continuity plans.

PUC auditors found that FE PA effectively or substantially implemented seven of the recommendations reviewed and has acted on the remaining eight items.

Notable improvements highlighted in the report include:

• Realizing approximately $174 million in operating and maintenance expense savings through FirstEnergy's FE Forward and FE Forward Refresh initiatives, with about $41 million of those savings allocated to FE PA.
  
  
• Cooperating with investigations and meeting settlement agreement obligations while enhancing the company's ethics and compliance culture.
  
  
• Implementing new internal controls over financial reporting, resulting in unmodified audit opinions throughout the review period.
  
  
• Establishing a new process for engaging with third-party collections agencies to improve collections performance.
  
  

Areas identified for further improvement include:

• Maintaining focus on compliance with ongoing settlement agreements.
  
  
• Enhancing transparency in base rate filings by disclosing cost increases linked to prior executive misconduct.
  
  
• Strengthening corporate governance through timely review and updating of affiliated interest agreements.
  
  
• Improving electric reliability by addressing the top outage causes with remedial programs and best practices.
  
  
• Developing workforce planning models to better manage overtime and storm response, with potential savings of approximately $4.3 million annually.
  
  
• Expanding penetration testing of Pennsylvania facilities to strengthen cybersecurity defenses.
  
  
• Addressing persistent inventory turnover challenges at distribution centers, with potential carrying cost savings between $147,000 and $1.1 million annually.
  
  
• Implementing enhanced safety training and performance targets to reduce accidents, potentially saving up to $575,000 annually.

In total, the MEI resulted in 12 follow-up recommendations related to prior audit findings and three new recommendations for improvement. According to the company's implementation plan, FE PA has committed to address these items, with many targeted for completion within the next year.

About Management Audits and Management Efficiency Investigations

State law requires the PUC to conduct periodic Management and Operations Audits of major jurisdictional utilities, reviewing a wide range of management practices, organizational structures, operations, and financial management.

Management Efficiency Investigations are follow-up studies designed to determine the extent to which a utility has effectively implemented recommendations from previous audits.

About the PUC

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.

Visit the PUC's website at puc.pa.gov for recent news releases and video of select proceedings. You can also follow us on X, Facebook, LinkedIn, Instagram and YouTube. Search for the "Pennsylvania Public Utility Commission" or "PA PUC" on your favorite social media channel for updates on utility issues and other helpful consumer information.

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Docket No.: D-2024-3050778

Contact:

• Nils Hagen-Frederiksen Press Secretary 717-418-2701 [email protected]
• David Hixson Deputy Press Secretary 717-772-2766 [email protected]