UIL Holdings has decided to continue trying to buy Philadelphia Gas Works. However, the Connecticut based utility can now drop its bid without a penalty.
Until midnight UIL would have been on the hook for millions of dollars the city spent preparing to sell PGW. UIL spokesman Michael West says the company still wants to purchase the utility, even though the process has stalled as Philadelphia City Council evaluates the proposed deal.
“At this point we’ve decided to continue and monitor the process as it goes along,” West said.
He says UIL is continuing to reach out to council as it evaluates the nearly $2 billion sale.
“We feel that it’s important that we have an open and public dialogue about this deal, we clearly feel we have the best proposal on the table, we’re proven operators of natural gas distribution systems and the merits of our proposal speaks for itself,” he said.
Mayor Michael Nutter in a statement praised the utility for staying the course with the sale.
“This incredibly important issue is squarely in front of City Council and both the Company and our Administration have been providing voluminous amounts of information to City Council and its consultant, Concentric Energy Advisors. We eagerly await Concentric’s report and the opportunity to present our case for selling PGW to City Council and the public. We stand fully prepared to provide Council with any further information or analysis it might need as it conducts its vital and historic due diligence on this matter. We look forward to the introduction of the legislation and the announcement of a schedule of Council hearings.”
Council President Darrell Clarke says, “City Council continues to gather information about PGW’s finances and operations and its actual value relative to the bids for purchase from private entities. We appreciate UIL Holdings’ cooperation to date in this process and welcome today’s offer of ongoing assistance. “However, yesterday’s deadline, which would have allowed UIL to drop its bid, was not set in consultation with City Council and did not consider Council’s duty to fully examine the details of this proposed transaction.” Clarke added
“While the press has largely been fixated on outside forces such as lobbyists that are pressuring City Council to fast-forward the review process, we in City Council answer to other special interests, namely, the households directly impacted by privatization of PGW and the hard-working men and women of PGW who have made this utility the prized asset it is today.”
No one on City Council has introduced a bill to sell the utility, despite requests from Mayor Michael Nutter. It seems likely the soonest that might happen will be after council returns from summer recess in September.
Nutter wants to use proceeds from the sale to refill underfunded city pension accounts. Some members of city council have voiced outright opposition, worried that a private company would try to trim workers to cut costs. UIL and the Nutter administration have assured current employees would keep their jobs for at least three years.
While UIL now can choose to end its bid at anytime without penalty, the proposal as now structured would end if not signed by the end of the year.