Sunday, April 19, 2015

Administration picks UIL Holdings for sale of PGW, according to letter

From today's Daily News:

Administration picks UIL Holdings for sale of PGW, according to letter

The neighborhood office of Philadelphia Gas Works at 5230 Chestnut St in West Philadelphia. (Alejandro A. Alvarez / Staff Photographer)
The neighborhood office of Philadelphia Gas Works at 5230 Chestnut St in West Philadelphia. (Alejandro A. Alvarez / Staff Photographer)

From today's Daily News:

Mayor Nutter's administration has selected UIL Holdings Corp. as the winning bidder for the sale of Philadelphia Gas Works, according to a letter from a lawyer representing a rival bidder that was obtained by the Daily News.

UIL, of New Haven, Conn., is the parent company of United Illuminating Co., Southern Connecticut Gas Co., Connecticut Natural Gas Corp. and Berkshire Gas Co., according to its website.

Administration officials declined to confirm or deny the choice of UIL.

Privatizing PGW, the country's largest municipally owned gas utility, is a major second-term priority for Nutter, who has proposed dedicating the proceeds to the city's beleaguered pension fund.

The letter obtained by the Daily News was from Cozen O'Connor lawyer Steve Cozen, who represented Liberty Energy Trust. It did not include the price or terms of the UIL deal.

Cozen could not be reached for comment.

The sale will require approvals from the state Public Utility Commission and City Council.

Council is in the process of hiring two consultants to help it evaluate the sale - one to vet the bids and another to explore alternatives to selling the utility.

Opponents of a sale include Councilwoman Marian Tasco, who chairs the PGW commission, the union for the utility's employees and those who are skeptical that a sale will be worth giving up the $18 million the city gets from it every year.

A city-hired consultant said last year that the sale would fetch between $1.45 billion and $1.9 billion and, after substantial debts and other obligations are paid, would net the city a profit of $422 million to $872 million.

Nutter has said that now is the perfect time to sell PGW, which in recent years rebounded from the brink of insolvency.

Philly is the only big city on the East Coast that still owns a gas utility.

The mayor's deputies have argued that the loss of the $18 million PGW fee to the city will be made up by a decrease in the city's required pension costs, assuming that the sale proceeds go to the retirement fund.

The administration methodically vetted the numerous bidders for the sale this fall and winter, and rumors have been swirling for weeks about the selection.

About this blog
William Bender, a Drexel graduate who landed at the Daily News in 2007, has covered everything from South Philly mobsters to doomsday hucksters. He occasionally writes about local food trucks and always eats everything on his plate, whether it be a bloody rib eye or a corrupt politician. E-mail tips to benderw@phillynews.com
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David Gambacorta, has been a reporter with the Daily News since 2005, covering crime, police corruption and all of the other bizarre things that happen in Philadelphia. Now he’s covering the 2015 mayor’s race, because he enjoys a good circus just as much as the next guy. He’s always looking to get a cup of coffee. Send news tips and other musings on life to gambacd@phillynews.com
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