City Agrees to Sell PGW for $1.86 Billion
On Monday morning, the Nutter Administration officially announced what had been floated last week: Connecticut firm UIL Holdings Corporation has been selected as the buyer for Philadelphia Gas Works (PGW).
The sale price is $1.86 billion. The city expects to have somewhere between $424 million and $631 million left after paying off obligations and putting money aside for future expenses. That amount is expected to go directly into the pension fund.
“When I announced nearly two years ago that the City would begin exploring the sale of PGW, I pledged that I would sign an agreement only if the terms benefited Philadelphia taxpayers and PGW customers,” Philadelphia Mayor Michael Nutter said in a statement on Monday. “This agreement accomplishes those goals and much more. UIL submitted the highest bid for PGW and agreed to contract terms that were important to the City. Our agreement keeps rates frozen for three years, maintains PGW’s discount programs for low-income families and seniors, safeguards PGW employee and retiree pensions and positions PGW to take full advantage of the abundant supply of natural gas in Pennsylvania to make our city and region a prime energy hub.”
The deal must be approved by City Council and the Public Utility Commission before it can be completed. UIL Holdings Corporation already has over 700,000 natural gas and electric customers in Connecticut and Massachusetts.
According to the city, the agreement stipulates that UIL will offer all PGW employees positions in the company.