Inquirer Editorial: Don't let a 'fix' nix PGW sale

CHARLES FOX / Staff
CHARLES FOX / Staff
Posted: May 30, 2014

City Council's nearly three-month review of the proposed sale of the city-owned Philadelphia Gas Works is beginning to look more like foot-dragging than careful due diligence.

City taxpayers, who for years have begged for a buyer to take the debt-prone PGW off their hands, must be wondering whether the intent of Council's deliberative pace is to kill the deal. Supporting that view is disturbing news reported Sunday by Inquirer staff writer Andy Maykuth that a politically connected unsuccessful bidder for PGW is positioning himself to benefit if the bid is rejected.

Liberty Energy Trust, a year-old firm started by former Enron executive Boris Brevnov, has been quietly promoting alternatives to the plan to sell PGW to UIL Holdings Corp. of New Haven, Conn., for $1.86 billion. Sources said Liberty's bid was not only $160 million short of UIL's, the offer was discounted because Liberty has no experience running a utility and no assets. What Liberty does seem to have is the backing of labor groups that don't want to see PGW privatized.

Suzanne Biemiller, Mayor Nutter's first deputy chief of staff, said Liberty Energy Trust "lost in a fair process. And now they are seeking to essentially upend that process by using means that I would argue are unethical."

Council President Darrell L. Clarke doesn't want Council to consider sale legislation until a Boston consultant has evaluated the UIL deal. He and Councilwoman Marian B. Tasco, who chairs the Philadelphia Gas Commission, insist that Council is simply trying to avoid Nutter's attempts to rush it to judgment.

That sounds good, but the two-year process that led to the bidding for PGW can hardly be called rushing. Then, too, the state Public Utility Commission must sign off on any sale of the Gas Works before it becomes official, so there's really little room for Nutter to rush the sale.

If there are good reasons to reject this deal, they should be revealed sooner rather than later. But in reviewing the bid, Council can't forget that it wasn't too long ago that you couldn't pay someone to take over PGW. And any unforeseen drop in the natural gas market could see those days return.

Supporters of the UIL bid include the Pennsylvania Intergovernmental Cooperation Authority, the city's fiscal oversight board, and former Mayor W. Wilson Goode Sr., who was once a member of the state PUC. Goode, now a minister, is particularly sensitive to the needs of low-income gas customers who are enrolled in energy assistance programs.

The government watchdog Committee of Seventy has suggested that Council at least introduce the PGW sale ordinance and hold an initial hearing prior to the beginning of its summer recess in June. To do otherwise would suggest another of the who-you-know deals that have long tarnished City Hall's reputation.

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