Philadelphia City Council kills deal to sell gas utility
Nathaniel Hamilton/for NewsWorks
Philadelphia Gas Works offices on Broad Street in South Philadelphia.
The $1.86 billion deal to sell Philadelphia’s natural gas utility to a private company is off, the City Council announced on Monday.
When the Nutter administration chose UIL Holdings as the winning bidder for PGW, City Council hired a consultant to review the entire process. Council President Darrell Clarke says after the extensive evaluation, council has decided not to move forward with a bill to sell the gas utility.
“As a result of those documents, the City Council through it’s process met with and talked to members and decided we could not endorse the deal as proposed,” he said.
Clarke says council will hold hearings in December to figure out what to do next with PGW, the largest city-owned utility in the country.
“Because the reality is the approach that was taken was very narrow and people need to understand about the process they need to understand the realities of this industry beyond commercials,” he said.
Announced back in March, Mayor Michael Nutter said privatizing the the 178-year-old distribution company would allow it ”to take full advantage of the abundant supply of natural gas in Pennsylvania” and to be a vital part of efforts to turn Philadelphia into a regional energy hub.
PGW gets about 45 percent of its supply from the Marcellus Shale, CEO Craig White said at a press event in September.
It is one of the nation’s oldest city-owned utilities and this year was ranked second worst for pipeline leaks by SNL Energy. The pace of replacing thousands of miles of old cast-iron pipes with tougher plastic ones has been hindered by the cost. The proposed buyer, UIL Holdings argued it would be able to get the job done at a faster rate.
Spokesman Michael West told NewsWorks the company did not have the opportunity to present its proposals to the City Council.
“We’re just trying to understand what this all means what all the parameters around this include and make a decision from there,” he said.