66 Pa.C.S. § 516

(a) General rule.--The commission shall provide for audits of any electric, gas, telephone or water utility whose plant in service is valued at not less than $10,000,000. The audits shall include an examination of management effectiveness and operating efficiency. The commission shall establish procedures for audits of the operations of utilities as provided in this section. Audits shall be conducted at least once every five years unless the commission finds that a specific audit is unnecessary, but in no event shall audits be conducted less than once every eight years. A summary of the audits mandated by this subsection shall be released to the public, and a complete copy of the audits shall be provided to the Office of Trial Staff and the Office of Consumer Advocate.

(b) Management efficiency investigations.--In addition to the audits mandated by subsection (a), the commission shall appoint a management efficiency investigator who shall periodically examine the management effectiveness and operating efficiency of all utilities required to be audited under subsection (a) and monitor the utility company responses to the audits required by subsection (a). For the purposes of carrying out the periodic audit required by this subsection and for carrying out the monitoring of audits required by subsection

(a), the commission is hereby empowered to direct the management efficiency investigator to conduct such investigations through and with teams made up of commission staff and/or independent consulting firms; further, the commission may designate specific items of management effectiveness and operating efficiency to be investigated. The management efficiency investigator shall provide an annual report to the commission, the affected utility, the Office of Trial Staff and the Office of Consumer Advocate detailing the findings of such investigations.

(c) Use of independent auditing firms.--The commission may require an audit under subsection (a) or (b) to be performed by an independent consulting firm. When the commission, under either subsection (a) or (b), orders an audit to be performed by an independent consulting firm, the commission, after consultation with the utility, shall select the firm and require the utility to enter into a contract with the firm providing for payment of the firm by the utility. The terms of the contract shall include all reasonable expenses directly related to the performance of the audit or to the management efficiency investigation activities of independent consulting firms at the utility, as well as their preparation and presentation of testimony in any contested litigation which may be undertaken as a result of the audit findings under subsection (a) or (b). That contract shall require the audit firm to work under the direction of the commission.

(d) Other powers of commission unaffected.--This section is not intended to alter or repeal any existing powers of the commission. (Dec. 21, 1984, P.L.1240, No.234, eff. 60 days; July 10, 1986, P.L.1238, No.114, eff. imd.) Cross References. Section 516 is referred to in sections 523, 2204 of this title.