IMAGINE WAKING up one day to learn that your cellphone carrier has been purchased by a foreign corporation. The monthly rate and minutes in the contract with your old carrier have changed. You're now paying more for less.
Imagine trying to reach your old carrier to complain, but the phone is disconnected and the emails bounce. Imagine then being told by your new carrier that you have no choice but to remain their customer for the duration of your contract.
This nightmare scenario could have been realized in Philadelphia had the Administration successfully sold the Philadelphia Gas Works to UIL Holdings Corp., based in Connecticut. The nation's oldest public utility would have been converted into a shareholder-run gas monopoly, with no opportunity for PGW's customers to consent to new contracts.
Unlike cellphone or cable service, home heating is not optional in Philadelphia.
The deal to sell PGW to UIL was made by the Nutter administration with no input from City Council or the citizens we represent. It should come as no surprise, then, that this deal did not address the myriad concerns the public has about privatization of the only gas utility in town. PGW is a municipal utility that operates only within the City of Philadelphia. That means every PGW employee must be a resident of Philadelphia, and every customer is located in Philadelphia. As the elected representatives of every PGW consumer and a largely working-class population, Council had an obligation to ensure that the administration's proposed sale agreement contained adequate and reasonable protections against drastic changes in costs and services.
UIL would be able to raise consumer bills even within the base-rate freeze period of the first three years of ownership. The sale agreement also lacked constraints on UIL's ability to depart from PGW policy and begin foreclosures on liens or third-party lien sales, potentially setting the stage for mass displacement of low-income residents and neighborhood destabilization. Further, commitments made by UIL would no longer apply if UIL decided to sell some or all of PGW's assets after becoming its owner.
The blizzard of ads paid for by UIL center on PGW's aging pipeline infrastructure. In reality, the sale agreement with UIL contains no language specifying a plan to expedite aging infrastructure replacement. Whereas state and local oversight constrains how PGW passes infrastructure costs on to customers, under profit-driven ownership bills would inevitably spike to recoup pipeline replacement costs.
City Council stands behind the decision to move past this one narrowly tailored plan for PGW while other, more beneficial options have yet to be fully explored. Today and tomorrow, Council will hear testimony from energy industry experts about new directions that the Philadelphia region can explore to take advantage of an economic boom resulting from energy and related industry opportunities.
We as a city have yet to fully explore our place in this rapidly growing industry, despite dramatic growth in energy-related jobs elsewhere in Pennsylvania.
In a study commissioned by Council, Concentric Energy Advisors identified five goals for the city as it ponders PGW's future:
* Minimize gas supply and delivery costs over the long run.
* Contribute to Philadelphia's economy by offering products and services that attract and retain businesses and by offering employment opportunities to residents.
* Grow top-line and net revenues from traditional regulated services and emerging competitive market opportunities to enhance PGW's financial position.
* Increase energy efficiency among customers in the near term and improve the efficiency of buildings over the long run.
* Support Philadelphia's economic and social policy goals.
Concentric further identified opportunities by which the city and PGW might achieve every one of those goals - opportunities that PGW could pursue whether under continued public ownership, private ownership, a public-private partnership or other models.
PGW is your company. Whether you're an elected official, business owner or block captain, please take this opportunity to be heard on PGW's future.