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Con Edison not open to change, unclear about investments: Audit

The state Public Service Commission released an independently conducted audit of Con Edison last week which determined that the utility has not effectively explained how investments would improve its aging infrastructure and found the company to be “an organization that has trouble seeing itself as others see it.”

The audit, released Friday, said the utility “has many positive service-oriented elements,” but that it “finds it very difficult to see different ways of doing things” and “coupled with a defensiveness borne in part of the external pressures of operating in an immensely bright spotlight, these traits work against making change.”

The PSC-released study focused on the utility’s planning process and operational efficiency as well as listing suggestions for improvement.

Western Queens elected officials, who have criticized Con Ed for its response to the 10-day borough blackout of July 2006 as well as a 2007 steam pipe explosion in Manhattan which killed one person, said they were pleased the audit took the utility to task.

“At long last, an audit of Con Edison 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,” state Assemblyman Michael Gianaris (D-Astoria) said.

The 605-page audit, paid for by Con Ed customers, determined the utility’s aging infrastructure requires billions of dollars in annual investments, but that “the company has not done a good job in explaining how such investments will satisfy the long-term needs of the system.”

According to the audit, the PSC has been “reluctant” to approve rate increases for Con Ed.

The report also found that the utility’s method of operation included “barriers to change,” such as “defensiveness, unrealistic self-assessment, inability to accept problems, unwillingness to consider alternate options” and “a belief that its critics ‘don’t understand us.’”

The audit determined that Con Ed “is an organization that has trouble seeing itself as others see it.”

The audit recommended Con Ed develop “a long range vision” for its electrical system as well as identify systematic issues, such as hot manhole covers and stray voltage problems, and addressing them before dangerous incidents occur.

In a statement, the utility said it had already started implementing recommendations in the audit.

“The audit acknowledges that we are doing many things right, an important consideration in a challenging economic and regulatory environment,” the statement read.

The utility also recently announced that it had applied for stimulus funds from the U.S. Energy Department for a smart grid project that would incorporate new technology for cleaner and safer delivery of electricity. Con Ed said it was already investing $6 million in a smart grid pilot program in the borough.

Reach reporter Nathan Duke by e-mail at nduke@cnglocal.com or by phone at 718-229-0300, Ext. 156.

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