Tuesday, July 29, 2014
Inquirer Daily News

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
Chris Brennan, a native Philadelphian and graduate of Temple University, joined the Daily News in 1999. He has written about SEPTA, the Philadelphia School District, the legalization of casino gambling, state government, the mayor, the governor, City Council and political campaigns. E-mail tips to brennac@phillynews.com
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Jenny DeHuff is a 2005 graduate of the University of Rhode Island, where she cut her teeth in journalism. A South Philly transplant from New England, she joined the Daily News City Hall Bureau in 2013. For the past several years, she has worked as an investigative reporter exposing corruption in suburban politics, covering sometimes ghastly criminal court cases and following the people’s money and how its spent. In addition to being a dogged news hound, she enjoys reading and writing about travel, animals, Irish whiskey and aviation. E-mail tips to dehuffj@phillynews.com
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Sean Collins Walsh is from Bucks County and went to Northwestern University. He joined the Daily News copy desk in 2012 and now covers the Nutter administration. Before that, he interned at papers including The New York Times, The Dallas Morning News and The Seattle Times. E-mail tips to walshSE@phillynews.com
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