UGI UTILITIES, INC. UGI CENTRAL PENN GAS, INC. AND UGI PENN NATURAL GAS, INC. MANAGEMENT EFFICIENCY INVESTIGATION IMPLEMENTATION PLAN RECOMMENDATION OVERVIEW No. Focus Area Recommendation Response Audit Report Reference 1 Executive Incorporate defined Accept III-1 Management and initiatives and overall Organizational corporate goals with related Structure performance indicators into the UGI Utility Group’s strategic planning process. 2 Affiliated Interests Develop, maintain and Accept IV-1 and Cost distribute a comprehensive Allocations cost allocations manual which fully addresses all cost allocations utilized for shared costs. 3 Financial Update the UGI dividend Accept V-2 Management policy to include all provisions currently considered and to add a provision for the Company to notify the Commission in advance, with explanation, when a dividend payout will exceed 85% of net income. 4 Gas Operations Strive to continue to reduce Accept VI-3 leak backlogs and maintain complete records to document the reclassification and elimination of leaks associated with main replacement activity. 5 Gas Operations Strive to improve the Accept VI-4 accuracy of the UGI’s NGDCs’ UFG calculation. 6 Gas Operations Develop a business case for Accept VI-5 using contractors for certain types of work into the Staffing Study and strive to employ the most cost effective, efficient workforce.
UGI UTILITIES, INC. UGI CENTRAL PENN GAS, INC. AND UGI PENN NATURAL GAS, INC. MANAGEMENT EFFICIENCY INVESTIGATION IMPLEMENTATION PLAN RECOMMENDATION OVERVIEW No. Focus Area Recommendation Response Audit Report Reference 1 Executive Management and Organizational Structure Incorporate defined initiatives and overall corporate goals with related performance indicators into the UGI Utility Group’s strategic planning process. Accept III-1 2 Affiliated Interests and Cost Allocations Develop, maintain and distribute a comprehensive cost allocations manual which fully addresses all cost allocations utilized for shared costs. Accept IV-1 3 Financial Management Update the UGI dividend policy to include all provisions currently considered and to add a provision for the Company to notify the Commission in advance, with explanation, when a dividend payout will exceed 85% of net income. Accept V-2 4 Gas Operations Strive to continue to reduce leak backlogs and maintain complete records to document the reclassification and elimination of leaks associated with main replacement activity. Accept VI-3 5 Gas Operations Strive to improve the accuracy of the UGI’s NGDCs’ UFG calculation. Accept VI-4 6 Gas Operations Develop a business case for using contractors for certain types of work into the Staffing Study and strive to employ the most cost effective, efficient workforce. Accept VI-5
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