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PGW sale likely never had chance to get to vote

Regardless of how the events are being spun in City Hall, it seems increasingly clear that Mayor Nutter's plan to sell the Philadelphia Gas Works was dead on arrival.

(Charles Fox / Staff Photographer)
(Charles Fox / Staff Photographer)Read more(Charles Fox / Staff Photographer)

Regardless of how the events are being spun in City Hall, it seems increasingly clear that Mayor Nutter's plan to sell the Philadelphia Gas Works was dead on arrival.

On a day when critics near and far berated City Council's closed-door decision to kill the sale, interviews with Council members, a review of the report prepared by Council's consultant, and statements from Council President Darrell L. Clarke all suggest that there was never a realistic chance that the $1.86 billion proposal to sell PGW would get to a Council vote.

In fact, many Council members said they had not yet read their consultant's full report - "I had one briefing," a member said - before Monday's announcement of the decision to spike the deal.

Why was that decision inevitable? The reasons offered, publicly and privately by Council members and those close to them, ranged from a belief that the proposed deal with UIL Holdings Corp. of New Haven, Conn., was flawed from the start, to members feeling shut out of the sale process, to just plain poor relations between Nutter and Clarke.

Clarke, in a Tuesday interview, traced his own dissatisfaction to a moment in February when Nutter addressed PGW's future at a Greater Philadelphia Chamber of Commerce luncheon and spoke of partnership with Council on the sale.

"That kind of upset me," said Clarke, who explained that in his mind there was no partnership yet at work.

That was certainly clear Monday afternoon when Clarke, with the rest of Council's leadership, announced that there would be no hearings on the proposal, which was designed in part to provide an infusion for the city's ailing pension fund.

"The simple fact of the matter is that there is not support on the City Council," Clarke said Monday. Council instead plans hearings on other possibilities for PGW's future.

Nutter, left to fume at a major initiative being stopped in its tracks by Clarke and Council, promptly called it the "biggest cop-out in recent legislative history in Philadelphia."

The decision not to take the proposal to hearings was also lambasted by the Greater Philadelphia Chamber of Commerce, which supports the sale of PGW, and the Committee of Seventy watchdog group.

On Tuesday, a powerful Republican joined the critics. State House Majority Leader Mike Turzai of Allegheny County suggested that in the future, the city would find a less sympathetic ear in Harrisburg when it comes to helping the Gas Works.

"By choosing parochialism over people or the good of the city and region, Philadelphia City Council sent a very clear message to Harrisburg, the business community, and its residents that it's unwilling to take control of itself," Turzai said.

Councilwoman Maria Quiñones Sánchez said she, too, wished there had been hearings and a vote. "A company that invested $20 million" in its proposal, she said, "should be entitled to an up-or-down vote."

Councilman David Oh agreed. "I would love to have a hearing," the Republican said. "I think everything should be made public."

But he wasn't willing to take the step needed to trigger hearings - sponsor a bill proposing the sale.

"Am I going to introduce it? No," Oh said. "I am not convinced."

In announcing the decision to skip hearings, Clarke's office leaned on a report by Concentric Energy Advisors, hired by Council for $522,000 to evaluate the deal.

Even so, most Council members interviewed Tuesday said they had not received a copy of the report until Monday.

Rather, they relied on briefings from Clarke's office and Concentric officials in assessing the deal, said the deputy majority whip, William K. Greenlee. Other members said they received summary sheets but had to turn them in after the briefings.

"I had one briefing on the report. ... I wasn't allowed to take copies," Councilman Ed Neilson said. He got a copy Monday afternoon and was still going through it Tuesday.

"I'm disappointed how it went down," he said. "I thought there would have been more discussion."

Then there was the report. It largely found favor with the bargain the administration had struck with UIL, while noting a number of objections that Council members had been raising since the proposed deal was announced in March.

Those objections turned primarily on the extent to which the city would lose influence over PGW operations three years after the proposed sale. That loss meant the city, and thus Council, would no longer have a say on matters such as billing rates, assistance programs for low-income ratepayers, and employment practices.

That Clarke's office highlighted those long-standing gripes suggests Council's opposition was deep-seated from the start.

Clarke acknowledged as much - but said it would have been wrong to kill the proposal at the outset.

"I told people who were interested that we would go through the process," he said Tuesday. "I didn't think it would have been fair for us simply to say no."

He went on to suggest the Nutter administration lost Council's support before there was even a sales agreement to weigh.

"The administration made the decision that they wanted to sell PGW," he said. "If you want us involved in the process, you should have asked early on if this was something Council would be interested in."

That point was echoed by other Council members, such as Cindy Bass, who said she was intrigued by other options for PGW. "I want to be able to weigh the various alternatives," she said.

Councilman James Kenney said he had yet to make his mind up about the sale, but was unhappy that Council was not given a larger role leading up to the proposal.

"There was a lot of secrecy and a lack of transparency with Council members," Kenney said. The administration has acknowledged that nondisclosure agreements with potential buyers limited what could be said during the sale process.

Councilwoman Marian B. Tasco - who chairs the body that oversees PGW, the Philadelphia Gas Commission - said she, too, wished Council had been consulted on a deal it was being asked to approve.

"They did not give us any options," said Tasco. "There was no room for us to have input."

Councilman W. Wilson Goode Jr. stressed that the idea of selling PGW wasn't dead - Council just didn't like the UIL deal.

Plus, next year's elections will bring new faces - by 2016, Goode said, "There's a new mayor and new Council."