Mayor Nutter considers selling city’s gas works

    Always looking for ways to ease the city’s financial burdens, Mayor Nutter is considering selling one of the Philadelphia’s biggest assets: the city-owned gas works.

    Always looking for ways to ease the city’s financial burdens, Mayor Nutter is considering selling one of the Philadelphia’s biggest assets: the city-owned gas works.

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    The Philadelphia Gas Works is the nation’s largest municipally-owned gas utility, serving more than a half million customers. This spring, the city invited proposals from firms willing to advise Philadelphia on whether it makes sense to sell the gas works, or privatize its operation.

    Nutter is at least the fourth mayor to explore selling PGW.

    “I think that it has been done before,” says city Finance Director Rob Dubow. “I think there’s been a change in terms of their financial condition, in terms of markets, and any kind of analysis that’s been done before would be stale now.”

    What’s new? The gas works is better managed than it was 10 years ago, and increased interest in natural gas as an alternative fuel makes it more attractive.

    But attorney and public advocate Phil Bertoocci worries that a sale will undermine the gas works’ commitment to serving its poor and working customers.

    “A utility that is investor-owned is more likely to be more concerned with its shareholders,” says Bertoocci. “And that it is its prime responsibility rather than the health and welfare of its customers.”

    City Gas Commission chair Marian Tasco said she feels she’s seen this movie before -private companies see PGW’s $900 million a year in revenue and figure they can run the utility more like a business and make a profit.

    But things change after they see the company’s high debt load, its poor and shrinking customer base, and the political complexities of a sale.

    “And its just didn’t work,” says Tasco. “It wasn’t successful. Once the companies sort of delved into the specifics and the details, they backed off.”

    The city hopes to hire an advisor on PGW and get a report by the end of the summer.

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