City Reaches Deal To Sell Philadelphia Gas Works - New York News

City Reaches Deal To Sell Philadelphia Gas Works

Posted: Updated:

PHILADELPHIA (AP) -- The city's distressed pension fund would get an injection of $424 million under a proposal for UIL Holdings Corp. to buy the city-owned gas utility for $1.86 billion, the mayor announced Monday.

Mayor Michael Nutter said the deal, which requires the approval of City Council and state utility regulators, would keep rates frozen for three years, maintain discount programs for low-income families and seniors, and safeguard employee and retiree pensions.

Philadelphia Gas Works, which traces its history to 1836, is the nation's largest municipally owned gas utility with more than 500,000 residential, commercial and industrial customers and more than 1,600 employees. New Haven, Conn.-based UIL serves about 706,000 electric and natural gas customers in Connecticut and Massachusetts.

The mayor told reporters that having the city own such a utility may have made sense at one time but "stopped making a lot of sense back in the '90s," since PGW can't expand its customer base outside the city and isn't as well positioned as a private company to take advantages of new opportunities. The utility was in dire condition well into the 2000s, but turnaround efforts have increased its value to the highest point in decades, he said.

"In an environment where there is great interest in the marketplace for this kind of entity, this really is the time to try to move something like this forward," he said.

The deal would help the city's meet its pension obligations, which are less than 50 percent funded.

Officials said after bond obligations are paid off and funds put aside for other liabilities, including fully funding PGW's own pension plan, the city expects to have $424 million to $631 million remaining that would be deposited into the city employee pension fund.

"The state of our pension fund and the crippling effect of its obligations ... on our city, is a major concern of mine and has been for years, and it's a concern shared by many, many members of City Council," Nutter said. The infusion and other planned investments could leave the fund percentage "in the high 70s" a decade and a half from now, which would be "a pretty healthy pension fund," Nutter said.

UIL's offer was the highest from the finalists, which were chosen from 33 entities that had originally expressed interest, Nutter said. It was "at the top end" of what the administration's financial adviser had forecast, he said.

Nutter said the approval process and discussions with employees and union members could be completed by the end of the year. The contract requires that all PGW employees be offered employment at UIL, with total employment not to dip below 1,350 employees for at least three years.

The mayor said the agreement "positions PGW to take full advantage of the abundant supply of natural gas in Pennsylvania, offering our city and our region the opportunity to become the prime energy hub in the United States."

UIL President James Torgerson said new federal environmental regulations aimed at reducing pollution from ships provide an incentive for them to switch engines from diesel to natural gas, and Philadelphia is "ideally positioned" to take advantage of that. He also said the company probably will need to expand a liquefied natural gas facility in the city's Port Richmond section.

The Utility Workers Union of America Local 686, which represents 1,150 PGW workers whose contract expires in 2015, is against a sale. Union activists have recently been circling City Hall in a truck urging Nutter to reject a sale.

Several environmental organizations immediately announced plans to fight the sale, saying it would increase gas bills and increase use of natural gas from the vast Marcellus Shale formation, which lies under Pennsylvania.

No filing for the sale has been made to the Pennsylvania Public Utility Commission on Monday, spokeswoman Jennifer Kocher said. The public also would have a chance to comment on the proposed transaction, she said.

  • Local NewsMore>>

  • Friends work to 'save' Pennsylvania bucket bear

    Friends work to 'save' Pennsylvania bucket bear

    A group of friends has tracked down and helped to save a western Pennsylvania bear that got its head stuck in a bucket-like contraption.
    A group of friends has tracked down and helped to save a western Pennsylvania bear that got its head stuck in a bucket-like contraption.
  • September Sizzle

    Tuesday, September 2 2014 9:03 AM EDT2014-09-02 13:03:36 GMT

    Summer is not over just yet!  Hot and humid conditions much of the week with temps in the 90's and upper 80's.

     

     

     

     

    Summer is not over just yet! Today will be very hot and humid with high temperatures in the low to mid 90s and mostly sunny skies.  A cold front will bring some thunderstorms tonight, some of which may be severe.

    Wednesday will be less humid but it remains warm all week long.

    Tuesday (93/72): Clouds/Storm

    Wednesday (88/74): Sun/Clouds

    Thursday (89/67): Sunny/Hot

  • All Bets Off As AC's Revel Hotel Casino Shuts Down

    All Bets Off As AC's Revel Hotel Casino Shuts Down

    Tuesday, September 2 2014 6:41 AM EDT2014-09-02 10:41:14 GMT

    Atlantic City's Revel Hotel and Casino has officially closed its doors Tuesday morning, a little more than two years after opening and following months of financial struggles.

    Atlantic City's Revel Hotel and Casino has officially closed its doors Tuesday morning, a little more than two years after opening and following months of financial struggles.

  • Local NewsLocal NewsMore>>

  • Long Island beaches reopen to bathing

    Long Island beaches reopen to bathing

    Tuesday, September 2 2014 10:08 AM EDT2014-09-02 14:08:19 GMT

    Health officials say six Long Island beaches that were closed for one day have reopened to bathing. The Nassau County beaches were closed Monday due to storm water runoff that could negatively impact bacterial levels. The beaches were: Laurel Hollow Beach, Morgan Beach, North Hempstead Beach Park, Sea Cliff Village Beach, Tappen Beach and Theodore Roosevelt Beach.

    Health officials say six Long Island beaches that were closed for one day have reopened to bathing. The Nassau County beaches were closed Monday due to storm water runoff that could negatively impact bacterial levels. The beaches were: Laurel Hollow Beach, Morgan Beach, North Hempstead Beach Park, Sea Cliff Village Beach, Tappen Beach and Theodore Roosevelt Beach.

  • 1 tube of Lincoln Tunnel closed after accident

    1 tube of Lincoln Tunnel closed after accident

    Tuesday, September 2 2014 10:02 AM EDT2014-09-02 14:02:27 GMT
    One of the tubes of the Lincoln Tunnel has been closed after a chain-reaction accident involving a New York-bound jitney bus and two other vehicles. Port Authority of New York and New Jersey spokesman Steve Coleman says four people were reported injured in the accident in the center tube at about 8:30 a.m. Tuesday.
    One of the tubes of the Lincoln Tunnel has been closed after a chain-reaction accident involving a New York-bound jitney bus and two other vehicles. Port Authority of New York and New Jersey spokesman Steve Coleman says four people were reported injured in the accident in the center tube at about 8:30 a.m. Tuesday.
  • Dispute over reclining seat diverts flight, again

    Dispute over reclining seat diverts flight, again

    Tuesday, September 2 2014 8:21 AM EDT2014-09-02 12:21:27 GMT
    Delta photoDelta photo
    A Delta Air Lines flight from La Guardia Airport to West Palm Beach, Florida, was diverted to Jacksonville because of a dispute between passengers over a reclining seat. Delta reportedly says the flight was diverted Monday night when a woman got into an argument with a passenger behind her when the woman was trying to recline her seat while the other passenger was trying to sleep on the tray table.
    A Delta Air Lines flight from La Guardia Airport to West Palm Beach, Florida, was diverted to Jacksonville because of a dispute between passengers over a reclining seat. Delta reportedly says the flight was diverted Monday night when a woman got into an argument with a passenger behind her when the woman was trying to recline her seat while the other passenger was trying to sleep on the tray table.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices