A third party audit of Con Edison said that the company lacked an “integrated vision or plan for the electric business across the long term.”
That was only one of the findings in a more than 600-page audit of the utility giant by Liberty Consulting Group, which was part of a three-way contract that included the state’s Department of Public Service (DPS). The report, which was released on Friday, August 7, examined eight management components including corporate mission, load forecasting, supply procurement, system planning, capital and O&M budgeting, project management, workforce management and results measurement.
“We concluded that the company has not been effective in justifying and communicating its capital investment needs, leaving those responsible for oversight, both internally and externally, in the difficult position of approving spending without a sufficiently clear sense of what customers get for that investment,” according to the audit. “The company’s explanations of spending are presented at a very detailed level and in technical jargon that make effective oversight impossible.”
In the audit, Liberty issued 92 recommendations addressing issues in each of the eight areas. In response to the audit, Con Ed released a four-page statement, and said they had already begun implementing some of the recommendations and would consider others.
“Over the last 13 months, Liberty, staff (DCP) and the company (Con Ed) demonstrated that a collaborative process of open and frequent dialogue can work well,” the statement read. “The company anticipates that its consideration and implementation of new ideas and approaches in business processes will ultimately benefit the most important constituents – our customers.”
A state DPS spokesperson said it would now begin the process of seeking public comment on this report to help improve Con Ed’s operations.
Meanwhile, the audit and its findings have also received praise from frequent critics of Con Ed.
“At long last, an audit of Con Ed confirms what we have known for years: an insular and defensive culture prevents Con Ed from admitting its mistakes and a perverse bonus compensation plan sends ratepayer money to executives’ pockets rather than to infrastructure improvements,” said Assemblymember Michael Gianaris in a statement.
After a blackout engulfed parts of western Queens in 2006 that left more than 175,000 residents and businesses without power for parts of 10 days, led a task force dedicated to reforming Con Ed that resulted in dozens of reform recommendations.
“I hope the PSC and Con Ed, itself, take heed of these findings to improve Con Ed management and avoid future disasters of the type that have plagued our city over the last several years,” Gianaris said.
