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City Council spends $20K on ads explaining PGW sale delay

While the proposed sale of Philadelphia Gas Works for $1.86 billion is on hold pending a City Council review, the Philadelphia City Council is airing ads on local AM radio news stations rationalizing the delay.

Philadelphia Gas Works. Credit: Rikard Larma, Metro Philadelphia Gas Works.
Credit: Rikard Larma, Metro

While the proposed sale of Philadelphia Gas Works for $1.86 billion is on hold pending city and state approval, he Philadelphia City Council has paid to air ads on local AM radio news stations rationalizing their lack of action in publicly reviewing the sale.

The ads feature City Councilwoman Maria Tasco telling listeners to KYW and WURD radio stations, "Given the complexity and importance of the proposed transaction, City Council would be irresponsible if we did not do our due diligence."

"We will not cut corners," Tasco continues.


Mayor Michael Nutter announced that he accepted Connecticut-based company UIL holdings' offer to purchase Philadelphia Gas Works (PGW) for $1.86 on March 3.

The proposed sale price was said to include $424 million that would be used for the city's pension fund. The deal would require approval by the Philadelphia City Council and the Pennsylvania Public Utility Commission.

However, City Council did not hold a hearing on the sale before breaking for summer recess. The agreement between the city and UIL Holdings gives UIL the option to leave the agreement if no action has been taken by July 15.

In late March, City Council President Darrell Clarke announced that Council would hiring "a Massachusetts-based consultant to evaluate "higher and better uses of and bids for Philadelphia Gas works."

Concentric Energy Advisors is receiving $425,000 for the contract.

According to Clarke's release in March, the analysis of bids to purchase PGW will include:

·Quantitative and qualitative analysis of bids to determine if they are thorough and reasonable, with a focus on likely customer rates under private ownership
·Comprehensive analysis of potential sale outcomes, including jobs impact and liabilities
·Analysis of energy market economics, pricing, rate design and regulatory issues

"[This] would be themost significant asset sale in Philadelphia’s history,” Clarke said in a statement at the time. “Given the scope of this potential transaction, it is City Council’s fiduciary obligation to taxpayers to ensure due diligence throughout this process.”

But Ellen Kaplan, vice-president and director of policy for the Committee of Seventy, a non-partisan political watchdog group, urged a City Council hearing even without the consulting report completed.

“Taxpayers deserve to know the facts of the PGW sale as they exist today. This deal has been on the table since early March and not one Council member will even introduce legislation to get the ball rolling,” Kaplan said in her May letter. “We certainly understand Council’s interest in waiting for its consultant’s analysis of the sale. But this doesn’t have to hold up a public hearing. If more information comes out in the report, Council can hold a second hearing.”

"Beginning the hearings before Council completes the city’s budget process and leaves for summer recess diminishes the perception that Council may be trying to kill the deal by inaction," Kaplan's letter continued.

Kaplan released a second letter in June, but City Council entered summer recess in June without a hearing on the sale.

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