Refinery head asks Phila. officials to 'reclaim' PGW sale

The Philadelphia refinery executive who is leading an effort to promote the region as an energy hub called on city officials Friday to "reclaim" a collapsed $1.86 billion sale of the municipal gas utility.

Philip Rinaldi, chief executive of Philadelphia Energy Solutions, urged Mayor Nutter and Council President Darrell L. Clarke to restart the sale process after Clarke's surprise announcement Monday that Council would not endorse Nutter's proposed sale of the Philadelphia Gas Works to UIL Holdings Corp.

"Although the rejection of the proposed UIL purchase of PGW is obviously discomforting, I personally have meaningful hope that what might evolve over the next several weeks will not only reclaim the advantages of that prospective sale, but might even result in a form of transaction better for all parties," Rinaldi said in a statement.

Rinaldi's relationship to the proposed PGW sale is complicated. As chairman of the Greater Philadelphia Chamber of Commerce's Energy Action Team, he leads a group that views the PGW divestiture as a critical element to attracting investors to take advantage of the proximity to booming Marcellus Shale natural gas production.

Philadelphia Energy Solutions had also worked with a losing bidder for PGW, Liberty Energy Trust L.L.C., whose continued interest has fed speculation that it is standing by with some kind of PGW-related partnership venture that Council might find more palatable than a complete PGW divestiture. Liberty's founder, Russian-born energy expert Boris Brevnov, visited Philadelphia on Thursday after the UIL deal collapsed.

"We don't have a dog in that fight," Rinaldi said. He said his company provided only "mild support" for the failed Liberty bid, which city officials said came in substantially below the UIL offer.

Rinaldi said he believes that Nutter and Clarke endorse an "energy-centric future for Philadelphia" and that they, "along with several well-placed and deeply concerned business and labor leaders, are presently working together to explore ways to evolve a PGW transaction."

The UIL agreement, announced March 3, came after more than two years of work to solicit bids. After debt and obligations are paid off, the city stands to net at least $420 million for its pension fund. "My bottom line is that the status quo is not acceptable," Rinaldi said. "Doing nothing with PGW is a big problem."

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