Council stalls moving forward on sale of PGW after warning memo

ALEJANDOR A. ALVAREZ / STAFF PHOTOGRAPHER James Torgenson , president of UIL Holdings Corp., a prospective PGW buyer, with Mayor Nutter last month. Council President Darrell Clarke expressed concerns about the sale in a memo to Council.
ALEJANDOR A. ALVAREZ / STAFF PHOTOGRAPHER James Torgenson , president of UIL Holdings Corp., a prospective PGW buyer, with Mayor Nutter last month. Council President Darrell Clarke expressed concerns about the sale in a memo to Council.
Posted: April 11, 2014

AFTER NO City Council member introduced Mayor Nutter's proposal to sell the Philadelphia Gas Works yesterday, Council President Darrell Clarke stressed that he never asked his colleagues not to introduce the bill.

But they got the memo anyway - because Clarke sent it to them the night before.

Clarke on Wednesday sent a letter to all members expressing concerns over a provision in the PGW legislation that he believes could end up tying Council's hands if it introduces the bill too soon.

"There is a provision that establishes a time line with the Public Utility Commission . . . [the administration's bill] would trigger a time line that would start the clock ticking on PUC's process," Clarke said yesterday after the meeting.

Language in the asset-purchase agreement requires that documentation be given to the PUC within 60 days of the introduction of the bill. Clarke said that raises concerns that the PUC could reach a conclusion before Council does, thus hampering Council's ability to have a say in the proposed sale.

"We have told the administration that we will do our due diligence, review their proposal, and at the appropriate time we'll make the decision on the time line that will be established for this process," he said.

"Nowhere in that conversation is there discussion about a PUC decision. There are concerns that PUC may come to a conclusion prior to Council's deliberation that could be totally different than what we end up with."

Some Council members are calling Nutter's bill a sneaky move.

"So PUC, according to this agreement, would be dealing with this agreement and this agreement only, despite what Council may think about it or what may change, which leads me to believe this administration is not playing open and fair with the information they are supposed to be providing us now," Councilman Jim Kenney said.

"Now that the opportunity finally comes to do an open and public discussion, that [PUC] provision is buried somewhere deep in the agreement so that we really have nothing to say at all in the end."

Nutter spokesman Mark McDonald said that the mayor has kept nothing about the sale of PGW close to the vest.

"We've sent voluminous amounts of information regarding the deal to Council and that information is now available to undertake the kinds of tests and questions and analysis it wants to do. From our perspective, we've moved the ball forward," he said.

Dan Clearfield, a lawyer representing the PUC, said that it generally takes about nine or 10 months for the commission to make a determination on an asset-purchase agreement, especially one of this magnitude.

"The filing of the application in April really starts the clock," he told the Daily News. "It's very typical in a process like this to have modifications to the application and changes in the terms of the deal."

Nutter wants to sell PGW to a Connecticut firm, UIL Holdings Corp., for $1.86 billion. Council is paying the Massachusetts-based Concentric Energy Advisors roughly $425,000 to review the transaction.

- Staff writer Sean Collins Walsh contributed to this report


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