Tuesday, July 29, 2014
Inquirer Daily News

PGW will pay $2.3 million in consultant fees to explore sale

Philadelphia Gas Works will pay $2.3 million for the financial, legal and communications consultants Mayor Nutter hired to explore the sale of the nation's largest gas utility.

PGW will pay $2.3 million in consultant fees to explore sale

Yellow pipes carry the natural gas (in vapor form) to begin the process of cleansing and liquifying the natural gas at the PGW plant on Venango St. in Port Richmond. ( Clem Murray / Staff Photographer )
Yellow pipes carry the natural gas (in vapor form) to begin the process of cleansing and liquifying the natural gas at the PGW plant on Venango St. in Port Richmond. ( Clem Murray / Staff Photographer ) Clem Murray / Staff Photographer

Philadelphia Gas Works will pay $2.34 million for the financial, legal and communications consultants Mayor Nutter hired to explore the sale of the nation’s largest gas utility.

The costs were barely approved Wednesday by the Philadelphia Gas Commission –the five member body responsible for overseeing management and operations of PGW.  In December, the gas commission’s staff recommended that the commission reject the $201,000 for communications consultants and $200,000 for government relations consultants to lobby City Council, but the commission approved those costs too.

The Nutter administration was pleased with the Commission’s decision.

“All of this is designed to get us an answer of what PGW is worth and whether the ratepayers, PGW’s customers and taxpayers would benefit from a sale,” said Suzanne Biemiller, Nutter’s first deputy chief of staff. Biemiller said the administration will interview bid brokers next week, a decision will be made in February and bids will be accepted in the spring.

City Councilwoman Marian Tasco, commission chair voted against PGW footing the bill. She said the city should pay the expenses and called it “unfair and unreasonable to burden PGW with any costs of a potential sale.”  The gas workers’ union and the city’s public advocate echoed similar sentiments.

City Controller Alan Butkovitz also voted against PGW paying the expenses. (He abstained on a vote pertaining to costs for legal advisors due to a conflict of interest.)

“It’s unprecedented. It’s never been done this way before,” Butkovitz said. “And if there’s any profit to be made it will be made by the city of Philadelphia.”

Butkovitz said the city is trying to stick the costs on ratepayers who would likely lose if the utility is sold.

The commissioners who voted in favor included Councilman Curtis Jones Jr., and two mayoral appointees, Carmen Adames, accountant and tax advisor and Royal Brown, vice president of treasury services at Independent Blue Cross.

“Any vote towards exploration for a potential sale should not be misconstrued as a green light for that sale,” Jones said.

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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