The city of Philadelphia’s gas utility took a small but potentially historic step Tuesday toward exploring a future business model that does not contribute to climate change.
The Philadelphia Gas Commission approved a $255 million Fiscal Year 2023 operating budget for Philadelphia Gas Works (PGW) that included a notable allocation: $500,000 for a geothermal feasibility study.
“This is just one step in a long journey,” said Rabbi Julie Greenberg of POWER Interfaith, an advocacy organization that has been pushing PGW to transition away from fossil fuels. “This was a building block towards the energy future we need.”
Geothermal energy — a renewable way to heat and cool homes using the stable temperature underground — was one of several potential new paths forward for the utility recommended for further study in a business diversification report released late last year.
PGW is the largest municipally owned gas utility in the country, and supplies city residents with gas for heating, cooking, and other household appliances. But its current business model — reliant on planet-warming fossil fuels — runs counter to the city’s goal of reaching net-zero carbon emissions by 2050. Scientists say the world needs to rapidly cut greenhouse gas emissions in order to avoid some of the most disastrous impacts of climate change.
The budget passed Tuesday could turn out to be the first step in the utility’s transformation.
“As a result of advocacy by POWER and allies, this is the first PGW budget, to my knowledge, to include a significant line item investment in a potential clean energy business model,” said Devin McDougall, a lawyer at Earthjustice representing POWER. The organization acted as an intervenor in the budgeting process.
In addition to approving the budget, the motion the Gas Commission passed Tuesday also requires PGW to provide quarterly reports to the commission about the geothermal feasibility study and the utility’s scope 3 greenhouse gas emissions — which include emissions both upstream and downstream of PGW’s operations.
“The reporting requirements are essential,” Greenberg said. “We own this utility. This is our municipal utility. And so does it make any sense for us to know nothing about the plans, or what’s going on, or how we’re making progress?”
There have been questions around PGW’s commitment to transitioning away from fossil fuels. But members of the city Gas Commission — which approves the utility’s annual operating budget and makes recommendations to City Council around PGW’s annual capital budget — have signaled a willingness to try to push the utility on the issue. PGW’s operations are overseen by the Philadelphia Facilities Management Corporation (PFMC).
Close to a dozen citizens spoke during Tuesday’s meeting, pushing for climate action. City Councilmember Curtis Jones, who sits on the Gas Commission, thanked them.
“We are thankful for the general sense of, I would say, a new mindset as it relates to what this commission can do to be a part of the solution, not just a part of the fossil fuel problem,” he said.
Of the five-member Gas Commission, only two members — Jones and At-Large Councilmember Derek Green — were present for the budget vote Tuesday. Kellan White, an official in the City Controller’s office, voted on behalf of City Controller Rebecca Rhynhart.
The day before, activists rallied outside the commission’s office, urging commissioners to require PGW to be more transparent and move faster toward a business model that’s not based on fossil fuels.
“We want PGW’s budget to show that the utility treats the climate crisis seriously as an immediate threat,” said Jordan Teicher, an organizer with Philly DSA (Democratic Socialists of America), which organized Monday’s rally. “We all know that we need to stop burning fossil fuels as soon as possible. Generally speaking, this is a business-as-usual budget. It’s not sufficient based on the threat that we’re facing.”
A coalition of 25 faith groups, community development corporations, and environmental organizations wrote an open letter to Commission members requesting “transparent, participatory planning” for PGW that will get the gas utility in line with climate realities.
This spring, members of the POWER clashed with PGW after the utility tried to limit public input in its budgeting process — and advocates have criticized the utility for helping shape state legislation that would have blocked efforts to promote electrification on a local level.
PGW has agreed to explore other business models. The much-anticipated business diversification study released late last year recommended additional study into three possible paths forward: geothermal energy, expanded weatherization, and harvesting sewer gas or landfill gas. It also warned of possible stranded PGW assets, high upfront capital investments, and potential increases for ratepayers.
Councilmember Green, who chairs the Gas Commission, said Monday he was still reviewing materials ahead of Tuesday’s meeting, and planned to ask PGW about the advocates’ requests. But he said it was important that the Commission approve PGW’s budget ahead of the utility’s fiscal year starting next month.
“Ultimately, we approve their operating budget and their capital budget,” he said. “So as they are moving through with their plans for how they’re going to diversify and how they’re going to have a geothermal pilot, that’s something that we can hold them accountable if they’re not moving forward fast enough.”
Advocates said they hadn’t gotten sufficient detail from PGW on how exactly the $500,000 for the geothermal feasibility study will be spent. They wanted the study to have clear goals, public input, and regular updates. They also want a commitment to benefiting low-income communities and maximizing participation by PGW workers.
“This $500,000 feasibility study needs to be more specific. I mean, that’s a huge amount of money,” said Linnea Bond, of Physicians for Social Responsibility Pennsylvania. “If that feasibility study is unsuccessful because it’s poorly designed, that’s going to put us backward in where we need to be headed.”
Similarly, the advocates called for PGW to give the public regular, detailed reports on its broader efforts to transition to a new business model not dependent on fossil fuels, along with regular opportunities for public input. They want PGW to set measurable pollution reduction goals for 2025 and 2030.
“We need accountability and transparency from PGW managers in order to ensure that we can have a just energy system, a livable climate, and affordable energy for Philly residents,” said Mitch Chanin, of Reclaim Philadelphia.
PGW spokesperson Richard Barnes said in a statement Monday that PGW does engage with stakeholders on all issues impacting customers.
“Our mission is to enhance the quality of life for all by delivering safe, reliable, and affordable energy in an environmentally responsible way,” he wrote in an email. “We are strongly committed to achieving an 80 percent reduction in methane emissions from our natural gas distribution system by 2050.”