Consultants for PGW sale stir controversy

In an early skirmish over Philadelphia Mayor Michael Nutter’s plans to market the city-owned Philadelphia Gas Works, some Philadelphia Gas Commission members object to paying for consultants who will work on the effort.

PGW is the largest city-owned gas utility in America. Nutter says if there are buyers willing to pay the right price and treat customers well, it might be smart to get the city out of the gas business.

He’s selected a team of lawyers, financial advisers, lobbyists and communications specialists to work on the deal, and — here’s the rub — he wants PGW to pay their fees.

The $2,736,005 in fees for the team are an item in PGW’s $697 million operating budget, which must be approved by the five-member gas commission.

City Councilwoman Marian Tasco is a veteran of the commission. 

“He has a right as the mayor to examine the possibility of PGW’s sale,” Tasco said. “But I believe that it should be paid for by the city and not by the ratepayers at PGW.”

Robert Ballenger, a Community Legal Services attorney who acts as a public advocate in the matter, agreed.

“To us, (the fees) don’t benefit customers,” he said. “It’s not an expense associated with operating the enterprise that is PGW.”

The Nutter administration says the expenses are both prudent and properly charged to PGW.

While gas commission members and staff say their concerns focus only on the fairness of charging fees to PGW customers, many regard the battle as a foretaste of the coming debate over whether city should divest itself of the utility.

A decision on the fee issue is expected next month.