UIL: Despite Crucial Deadline Passing, We Still Want to Buy PGW

[UPDATE: 12:07 p.m.] Mayor Michael Nutter has issued a statement praising UIL Holdings for not backing out of the PGW sale, and essentially letting everyone know where the bottleneck is:

“This incredibly important issue is squarely in front of City Council and both the Company and our Administration have been providing voluminous amounts of information to City Council and its consultant, Concentric Energy Advisors,” Nutter said in the statement. “We eagerly await Concentric’s report and the opportunity to present our case for selling PGW to City Council and the public.

“We stand fully prepared to provide Council with any further information or analysis it might need as it conducts its vital and historic due diligence on this matter. We look forward to the introduction of the legislation and the announcement of a schedule of Council hearings. Philadelphians have an absolute right to know the basic details of the transaction and how it will impact them as consumers and also how it will affect the dedicated workforce and retirees of PGW, the fiscal impact on City government and its Pension Fund and the city’s economy.”

Full statement below:

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City Council Study of PGW Sale to Cost Nearly $100K More Than Expected

Photo | Jeff Fusco

Photo | Jeff Fusco

On the eve of a deadline that would allow Connecticut-based UIL Holdingsto back out of an agreement to purchase PGW for $1.86 billion, the Inquirer reports that the studies commissioned by City Council to evaluate the deal will end up costing $522,750. That’s nearly $100,000 more than the $425,000 Council had previously announced it was going to be paying Concentric Energy Advisors. The reason? Council modified its original RFP:

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City Council Spending $20K on Ads Defending Delay on PGW Sale

In February, Mayor Michael Nutter announced the sale of PGW for $1.86 billion. But City Council has questions, and didn’t review the sale before the summer recess. That delay matters: Since Council hasn’t taken any action yet, UIL Holdings can back out of the proposed sale after July 15.

Now, of course, the latest twist: City Council is spending $20,000 on radio ads defending the delay. Wait, what?

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Council Won’t Finish PGW Sale Review Before Recess

When City Council ends its spring session today, it will leave one major piece of unfinished business behind: Whether or not to approve the sale of Philadelphia Gas Works to a Connecticut company.

As CBS Philly reports: “With Council adjourning today until the fall, that means Council won’t be holding a public hearing on the PGW sale until long after July 15th, the date on which the prospective buyer, UIL Holdings of Connecticut, could opt out of the deal.”

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Clock Is Ticking on PGW Sale

Mayor Nutter wants action. City Council won’t be rushed.

Whether or not the mayor is an irresistable force, the council certainly is proving to be an immovable object. Faced with a July 15th deadline for the sale of Philadelphia Gas Works — after which, proposed purchaser UIL Holdings can simply walk away — the Council has responded by … not really responding. (UIL has not said if it will walk away.) Council President Darrell Clark says a full review is more important than externally imposed deadlines.

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Sam Katz Is Right: It’s Time for Philly to Get Creative and Privatize

Photo | Jeff Fusco

Photo | Jeff Fusco

Sam Katz is right.

In a recent Philadelphia Inquirer opinion piece, he urged “creative solutions” to the city’s funding crises. Among his recommendations were the passing of an additional sales tax and completing the sale of the Philadelphia Gas Works (PGW) so that the proceeds could be used to partially fund the city’s pension liabilities and school district budget gaps. “In approving the sale of PGW and dedicating the first $120 million of the sales tax to our schools, the city can tackle both problems and send a powerful message to the skeptical state leaders that Philadelphia is innovatively addressing challenges with smart policy choices,” he wrote.

By why stop there? Katz, a former mayoral candidate and a business man, is only proposing what any other rational business person would do when faced with too much debt and not enough cash flow: Sell assets and pay down liabilities. He wants the city to be more creative, more innovative. And he’s on to something.

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Committee of 70 Presses Council for PGW Sale Hearing

Just a few weeks after its first attempt, the Committee of 70 has renewed its campaign to get City Council to hold a hearing on the proposed PGW sale before it recesses for the summer. Why? Because the proposed buyer could, reportedly, walk away from the deal on July 15th — and the Committee doesn’t want to see the deal scotched without going through an actual public process.

Here’s the text of a letter to Council President Darrell Clarke, just released by the Committee:

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Council Will Consider PGW Sale on Its Timeline — Not the Mayor’s

CBS Philly reports that the City Council will adjourn for the summer on June 19th without deciding whether to approve the sale of Philaelphia Gas Works to a Connecticut company — even though the company can, under contract, walk away from the deal if it’s not finalized before July 15.

Council President Darrell Clarke said that deadline was agreed to by Mayor Nutter and the company, UIL Holdings. The council had no input. And that’s not the only problem, he says.

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Committee of Seventy Asks for Public Hearing on PGW Sale

A press release from the Committee of Seventy just hit our inbox:

SEVENTY URGES PUBLIC HEARING ON PGW SALE 

Says Council Shouldn’t Wait for Consultant’s Report   

PHILADELPHIA – May 19, 2014 – To put the facts on the table about a $1.86 billion deal to sell the Philadelphia Gas Works, the non-partisan Committee of Seventy today urged Philadelphia City Council to hold a public hearing before its summer recess.

According to Seventy’s VP and Policy Director Ellen Mattleman Kaplan, Seventy has not taken an official position on the Nutter administration’s agreement to sell PGW to UIL Holdings Corporation. Expected to generate at least $424 million for the city’s pension fund, the deal must be approved by City Council and by the Pennsylvania Public Utility Commission.

“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. “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.”

Kaplan explained that Seventy’s call for a public hearing is prompted by UIL Holdings’ contractual right to walk away without penalty if Council doesn’t approve the deal by July 15. “We hope UIL hangs tight until the issue is resolved one way or the other. 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.”

The City Council last month stalled on introducing the bill authorizing the sale, noting it would set in process a regulatory process that includes state review. Also in April, Philly Mag interviewed a top executive at UIL Holdings —the proposed buyer — to discuss the utility’s future in private hands.

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