UIL Holdings terminates deal to buy PGW

UIL Holdings, the Connecticut utility company chosen by Mayor Nutter to purchase PGW for nearly $2 billion, has killed its offer indefinitely.

"Unfortunately, there was not enough political will to get this done," said UIL spokesman Michael West.

"Our investment apparently wasn't that attractive to some City Council members in leadership, so we felt that we needed to exit the deal at this time.

"We are disappointed by not having an opportunity to represent the facts of it, and clearly there's no action by Philadelphia City Council to introduce a bill anywhere in the foreseeable future…We knew we had a strong case. Unfortunately, it just didn't happen for us in Philadelphia."

UIL signed an Asset Purchase Agreement to buy PGW in March and had the contractual rights to bow out at anytime. But with City Council signaling no member would introduce a bill for that to happen, UIL decided to pull the plug. The deal would have expired automatically on Dec. 31.

Mayor Nutter issued the following statement about the decision:

"This decision by the Philadelphia City Council is a big mistake and represents a massive failure of leadership for our city and our citizens…The citizens of our city, the customers of PGW and our own city workers will feel the negative effects of this terrible indecision for years to come, and ultimately will regret that City Council chose to end a legitimate debate on this issue even before it started."

Proceeds from the $1.86 billion transaction would have gone into the city's beleaguered pension fund, which is missing half of what it needs to be self-sustaining.

City Council President Darrell Clarke issued his own statement after the UIL news broke, saying the company "never had a chance of winning our endorsement."

"It is unfortunate that Mayor Nutter chose to pursue an extremely narrow deal to privatize PGW that ignores opportunities to increase Philadelphia's economic output. This deal would have resulted in significant job loss among Philadelphians by allowing UIL to lay off employees and to shift jobs away from experienced PGW workers.

"Make no mistake, the failure of this deal is not the fault of UIL Holdings. The lack of sufficient jobs, consumer and safety protections in this deal are a direct result of the Nutter Administration's Request for Proposals, which was limited in scope and issued with no input from City Council."