Firm Says PGW Sale Poses Concerns

Would a private company run utility better than City Hall?

Photo | Jeff Fusco

Photo | Jeff Fusco

KYW Newsradio reports that a new report is raising concerns about the sale of Philadelphia Gas Works to UIL Holdings, a private Connecticut company.

The report from Concentric, a consultant to City Council on the sale, hasn’t been made public, but council members have been briefed on the contents. And it raises two main questions, council member Maria Quinones Sanchez says:

Among them: the possibility that UIL would turn around and resell either PGW’s Liquid Natural Gas facility, or resell the entire utility.

“The concern is — what is to stop a company from coming in, figuring out it can’t make a profit, flipping it or splitting it, Quinones Sanchez says, “and creating a situation where the city would be dealing with two potentially different entities?”

Also questioned by the consultant, according to Quinones Sanchez, is one key premise of the sale — that private owners would run a tighter ship, thus keeping rates down.

“The ability for a private company to be more profitable or efficient is not as clear cut as folks would like us to believe,” she says

Quinones Sanchez, however, said the report contains neither an explicit thumbs-up or thumbs-down on the deal. That will be up to council — and the state’s Public Utility Commission, which also holds power of approval. The sale of PGW is expected to net nearly $2 billion, from which proceeds would be used to shore up the city pension system.