UIL Explains Why It Wants to Purchase Philadelphia Gas Works — and What it Intends to Do With It

Connecticut company says it's ready for the Philadelphia challenge.

Let’s go back and talk about the union workers, because you do seem to have good relationships with your workers in Connecticut and Massachusetts. You obviously know that PGW’s union workers are fearful that they’re going to have to start contributing more of their income to health and pensions and all that. You obviously haven’t been to the bargaining table yet because you’re not in that position, but is it reasonable for them to expect that they’ll be asked to make some kind of givebacks in the future?

I’ve often said, and continue to say, that that’s a mandatory condition of bargaining. So we wouldn’t bargain at this moment because we don’t own them. There’s not anything that we can do there. The contract doesn’t expire until May 2015, so we’re even more than a year out. We typically don’t even begin those kind of early discussions until 10, maybe nine months out from your expiration date. So it’s very premature.

Given the political power that unions have, not just in this particular instance but in the city overall, I have to ask: Have you reached out to the unions in any fashion up to this point?

We have six unions here right now. We provided them with all the names and numbers of all of our union leadership and said, “If you don’t believe us because somehow you may think management is whatever, call them.” They’ve called them, they’ve talked to them, asked them how we negotiate, asked how the environment is. It’s not as if everything is 100 percent, you know peachy keen, if you will, but I think they will say and they have said, you know, how fair we are as a company. We try to get to the interest of everybody and figure that out. We wouldn’t have six unions, six different contracts if we didn’t know how to talk to laymen and work with laymen.

What will be different, or even better if I’m a PGW customer right now? What’s going to be different and better about the service that I see?

I can’t speak to the PGW service levels, because I don’t know what they’ve been today. What I can say is, under UIL ownership, part of what’s missing in all of these discussions that have been public so far is many other things we actually included in our bid letter, which included an effort to have this urban revitalization project that utility is involved in. That’s something PGW can’t do today. Our philanthropic efforts, not-for-profits and other organizations that help in the community, specifically, that’s something PGW can’t do today. The levels of investment that we plan to make, are [not only for] making the system better, but are actually [for] creating jobs for others to help bring them along in their economic process. It’s something PGW can’t do at the speed we can do it today. So, I mean, there are a whole host of things that I think the community will see a difference in, just because we operate and we’re structured in a different fashion. And we’ve done it, already. We do it in Connecticut and there’s hardcore examples of that.

And to the extent that you won’t see higher bills, [that’s] because we have a shared services model, and because we spread costs across the corporations. There’s nowhere else for PGW to spread those costs. We can minimize the impact on customers. We have done it. In our electric business in Connecticut, we had a rate plan that expired in 2010. We didn’t go back in for any increase or ask for any change of our rates until 2013, late 2013. That’s because we looked at what the economy was doing, we looked at what the impact on customers might be, we figured out ways to tighten our own belt first, before we went out and said, “Here’s the ask to the PUC.” That’s responsible business. That’s a smart and a prudent way to do a business. And we would do the same here.

There’s no one thing that decides if you have a rate case or not. We look at all the factors, and we make good decisions based on that. And so, if it was purely money-driven, like many have tried to imply, there’s no way we would have not gone in for a rate case for a couple years. That’s not how we operate. We know how to manage our business effectively, we know how to manage our own costs, and because of that effective management style we minimize impact on customers.

Follow @JoelMMathis on Twitter.

Check out UIL Holdings‘ most recent SEC filing for an overview of the company.

Check out ExploringTheSale.com for City Hall’s case for the sale.