Philly climate activists celebrate a rare win in their battle to reform PGW

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Climate activists are celebrating a rare win in their ongoing battle to push Philadelphia Gas Works to transition away from its century-old mission that provides city residents with fossil fuels.

The proposed settlement, which stems from a ratemaking case before the Pennsylvania Public Utility Commission, reduces the city-owned utility’s original planned rate hikes by about 40%. It would also create a public engagement process to plan for Philadelphia’s long-term climate goal of zeroing out its greenhouse gas emissions by 2050.

“So I’m here to celebrate … because PGW needs to be on the right side of history,” said state Rep. Chris Rabb, speaking at a press conference with environmental groups Wednesday in front of City Hall. “I believe it will be, and it’s because of all of you coming together to make it happen. And I believe that PGW and its leadership can and will do the right thing. And we just have to keep them accountable, just like you all keep us as elected officials accountable.”

Rabb got a laugh from the gathering of activists when he referred to PGW as “Philadelphia Geothermal Works.” The groups have been pushing PGW to adopt carbon-free technologies like networked geothermal.

“It’s in PGW’s best interest to diversify its operations and not just rely on fracked gas, because folks, there’s no such thing as ‘natural’ gas,” Rabb said. “That’s like saying clean coal, people. You can’t do it. It’s fracked gas. That is not the future, that’s the past.”

While the city has made some progress in cutting its carbon emissions, the plan for its fossil fuel company is unclear. It’s also unclear how PGW will act on any future public testimony about climate impacts. While the settlement agreement requires two public hearings, it does not require the utility to act on the results, only that it “may incorporate feedback … into its low carbon pathways evaluations and considerations as practical and as determined by PGW.”

“So time will tell how PGW responds, which is why we want to celebrate,” Rabb told WHYY News. “This settlement, this proposal, is why we want to publicly thank PGW for moving in the right direction and to hold PGW to account just like folks hold elected officials to account. It’s a public utility. It’s owned by the people. We celebrate each small victory because success is going to take a long time, and we’re an old, big city with an old infrastructure, and nothing is going to happen overnight, but in this moment we have to take the win.”

In the past, climate advocates had been frustrated by PGW’s lack of public engagement on climate issues. In the spring, as part of the same ratemaking case, PGW had sought information about members of the environmental groups that had intervened in the case. The groups fought back, saying the move would have violated their First Amendment rights and that it was retaliation for their participation in the case. A judge agreed, and denied PGW the information.

The proposed settlement will have to be reviewed and approved by an administrative law judge, before being passed on for approval by the Pennsylvania Public Utility Commission.

A spokesman for PGW said the utility “cannot comment on pending proceedings” but referred to a message to its customers online that states if the new rates are approved, they “will maintain the company’s financial health, further modernize its infrastructure, and deliver safety and quality of life enhancements for its customers.”

PGW agrees to reduce planned rate hikes, review its warm winter fee

PGW’s original proposed rate hike for fiscal year 2026 would have increased the average residential customer’s monthly bills by about $12 a month, from $92.60 to $104.61, according to the PUC. But the new settlement, which is an agreement worked out with all parties to the rate hike case, including those who strictly advocate in the interest of affordability, as well as a coalition of environmental groups collectively known as the Energy Justice Advocates, reduces that rate hike by more than 40%.

The utility also agreed to review how it calculates a surcharge known as “weather normalization” to be more in line with a warming climate. When winters are warmer than expected, which is increasingly the case due to climate change, and customers use less gas to heat their homes and buildings, the utility can make up for the loss through an added charge. It also credits funds to customers when the winters are colder than expected. In 2022, during a particularly warm winter, weather normalization charges made headlines after customers received shockingly high bills that the utility later refunded after the outcry.

PGW also dropped its proposal to apply “revenue normalization,” a potential surcharge to a customer’s bill should the weather normalization charge not be adequate to make up for any unanticipated losses.

“This proposed settlement represents an important step towards a clean energy future for Philadelphia, and it provides critical protections for Philadelphians against increasing energy costs,” said Patrick Houston, with the group Here for Climate Justice.

Houston praised PGW’s commitment in the settlement agreement to budget $9 million to improve insulation and weatherize low-income customers’ homes in 2026.

“We know that weatherization reduces energy consumption, and reduction in energy consumption also reduces energy costs,” Houston said. “The proposed settlement improves PGW programs that are crucial for low-income residents, like the customer responsibility program.”

The PUC is expected to make a decision on the proposal in November.