$1.9B sale of Philadelphia Gas Works is dead

A $1.9 billion deal to sell the Philadelphia Gas Works and use proceeds to reduce the city's massively underfunded pension is dead.

City Council will not be moving forward with the sale of utility company, Council President Darrell L. Clarke announced Monday, surrounded by council's leadership.

Since 2012, Mayor Nutter has wanted to sell the 176-year-old utility to use to reduce the city's underfunded pension obligations. Earlier this year, Nutter announced a deal to sell PGW to UIL Holdings Inc.

The sale - expected to net the city $420 million to $631 million after all PGW pension and debt obligations are paid off - requires approval from City Council and the Pennsylvania Public Utility Commission.

Council hired Concentric Energy Advisors of Massachusetts in March to produce two reports: one examining the sale and one exploring alternatives to selling the 176-year-old utility. Concentric was paid $425,000 to review the deal.

From the start, members of City Council were under pressure from PGW's union to reject the sale.

On Wednesday, Clarke said "We do not endorse the sale." However, hearings will be scheduled to "talk about broader picture," of Philadelphia's future as an energy hub, Clarke said.

"There's no appetite for sale," Clarke said when asked if there was any chance of a sale resolution being introduced before the end of the year. It was a "very limited RFP . . . Significant limitations," Clarke said.

The sale had been endorsed by the business community and the city's fiscal overseer, the Pennsylvania Intergovernmental Cooperation Authority (PICA), endorsed the sale of PGW.

Source: Philly.com