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 )

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.