PGW deal shows City Hall's position of power

There's no mystery as to why City Council President Darrell Clarke used a consultant's study as his weapon to kill the proposed sale of municipally owned Philadelphia Gas Works to a private utility. It was an exercise in sheer power. Clarke wanted to put to rest any doubts about his dominance in City Hall.

You need nine votes on the 17-member Council to get anything done, but Clarke doesn't have to worry about that. Rarely do other Council members utter a peep in opposition to their president's desires. They stood with him Monday as he announced Council wouldn't even vote on the PGW sale proposal. Only afterward did some admit they hadn't read the consultant's report Clarke offered as evidence that the offer by UIL Holdings Corp. to buy PGW for $1.86 billion should be rejected.

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Council President Darrell Clarke CHARLES FOX / File Photo

Talk about Congress voting on legislation its members didn't take the time to read; Council wouldn't even take a vote. Had other Council members actually read the report, they would have seen that it concluded that UIL might be able to reduce or defer the rate hike PGW has projected for next year. That tidbit wasn't included in a staff summary Clarke distributed.

Clarke also contended that the UIL offer was less than it seemed because the city would no longer receive an $18 million annual payment from PGW. But Mayor Nutter has disputed that, saying the net sale proceeds of $420 million or more would give the city a "once-in-a-generation opportunity" to raise the funding level of the city employees' pension fund to above 50 percent within two years of deposit.

That looks unlikely to happen now because Clarke nixed the deal.

So if Clarke is the most powerful person in City Hall, what does that make Nutter? The PGW deal was the mayor's work, the result of an effort that took the better part of two years. But Clarke from the beginning showed his disdain for the proposal because he had not been included in its formulation.

But did he have to spend more than a half-million dollars, the cost of the consultant's study, to make his point that nothing gets done in Philadelphia if you don't have the right people on your side?

That tip of his hat to a way of doing business that Philadelphia has become infamous for won't entice many companies to come to this town. Especially when they find out UIL spent $20 million in trying to spend another nearly $2 billion to buy PGW, but in the end was told to go home.

Republican House Leader Mike Turzai of Allegheny County says killing the UIL deal won't sit well with the legislature if the city finds itself returning to Harrisburg for legislative changes to benefit PGW. Turzai accused Council of "choosing parochialism" over the good of the region. The Pennsylvania Intergovernmental Cooperation Authority, which oversees city finances, likely agrees. PICA endorsed the UIL sale back in May.

It wasn't that long ago that Philadelphia felt like paying someone, anyone, to take PGW off its hands. The gas company has a billion dollars in debts and an underground pipe system in dire need of improvements. Most of PGW's aging mains delivering natural gas throughout the city are considered "at risk." UIL had promised to speed up the pace of upgrading pipes. That won't happen now, potentially putting families and businesses at risk.

This being Philadelphia, one has to believe that Clarke, who promises Council will come up with an alternative to selling PGW, already has his mind made up about what that alternative should be. Perhaps that's the only mystery for Philadelphians: who will benefit from UIL's failure, besides Clarke, who walks away with the title of the most powerful person in City Hall?


Harold Jackson is editorial page editor of The Inquirer. hjackson@philly.news.com