Efforts made to save PGW sale

The window is closing on Mayor Nutter's proposed $1.86 billion privatization of the Philadelphia Gas Works, but powerful forces remained busy Thursday trying to cobble together a last-minute deal to address issues raised by sale opponents.

Labor leaders John Dougherty and Pat Gillespie are working with buyer UIL Holdings Corp. to draft a proposed sale ordinance that would formally commit UIL to accelerated infrastructure investments, as well as stronger protections for low-income customers and union employees.

The efforts to salvage the deal have picked up speed in the last week after Alex V. DeBoissiere, UIL's senior vice president for government relations, made a brief, surprise appearance before City Council and said the Connecticut company was willing to amend sale terms to address Council's concerns.

"We're trying to think of ways to give you a comfort level," DeBoissiere told Council on Nov. 13.

But no Council members stepped forward at Thursday's meeting to introduce an ordinance authorizing a sale.

Council could still introduce such an ordinance at its two remaining meetings this year, Dec. 4 and 11, but it would require Council to schedule additional meetings to consider the measure before year's end. The sale agreement expires automatically on Dec. 31, if Council has not approved it.

Nutter and UIL could also agree to extend the sale agreement, if it appeared a deal was imminent.

"There is time within which the sale of PGW to UIL can be considered and completed by City Council," said Mark McDonald, Nutter's spokesman. "There are dates available should City Council desire to do so."

Any compromise would require the endorsement of Council President Darrell L. Clarke, who announced on Oct. 27 that Council had no appetite for the sale and would not hold hearings. Clarke on Thursday declined to comment.

Sale proponents say the transaction would boost the city's anemic pension fund, free the city of PGW's financial and environmental liabilities, and put the utility in a better position to grow. UIL has promised to double the speed at which PGW is replacing its gas mains.

Opponents, many of whom express a deep suspicion of profit-making utilities, fear losing control of a valuable city asset and leaving low-income customers and public employees unprotected.

A key issue is the role PGW would play in the emerging "energy hub" concept of businesses aiming to tie into the Marcellus Shale gas boom.

A study by Econsult Solutions of Philadelphia, released last week, concluded a PGW sale to UIL would generate "a significant net benefit to the city's natural gas customers, to Philadelphia city government, and to the city and region's economic future."

The study was commissioned by the Mechanical Trades Council of Delaware Valley, a union umbrella group headed by Dougherty, the politically powerful head of Electrical Workers Local 98. Dougherty has been working alongside Gillespie, head of the Building Trades Council, to forge a compromise. Neither labor leader was available for comment.

Chris Rupe, Local 98's director of legislative affairs, last week presented the Econsult study to a special meeting of the Pennsylvania Public Utility Commission. He said the unions were "very excited" about private-sector ownership of PGW.

"We can really attract private investment and levels of capital we have really never seen before in Philadelphia to develop thousands of family-sustaining jobs for generations to come," said Rupe.

But labor's support comes with a big hurdle - getting PGW's unionized workers to sign on.

Gas Workers Local 686 has remained steadfastly opposed to any sale. James F. Runckel, the union's lawyer, said Thursday it was "difficult to conceive" of any compromise that would satisfy the union.

"We just don't want to see it privatized," he said.

Source: Philly.com