City Council wages its own campaign regarding sale of PGW

Marian Tasco, chairwoman of the Philadelphia Gas Commission.
Marian Tasco, chairwoman of the Philadelphia Gas Commission.
Posted: July 10, 2014

Philadelphia City Council may have taken the summer off, but its tit-for-tat continues with the Nutter administration over the sale of the city's gas utility.

Council is spending $20,000 to run radio ads explaining why it has not taken action on the proposed sale of Philadelphia Gas Works, which Nutter announced more than four months ago.

Under the nearly $2 billion sale agreement proposed in March, Connecticut-based UIL Holdings Corp. has the option to back out of the deal after July 15 if City Council has not taken action. Council went into recess without introducing sale legislation or scheduling hearings.

"Given the complexity and importance of the proposed transaction, City Council would be irresponsible if we did not do our due diligence," Councilwoman Marian B. Tasco says in the one-minute ads, which are running on KYW and WURD.

"We will not cut corners and rush to make a judgment that will have an impact on every ratepayer in this city," says Tasco, the chairwoman of the Philadelphia Gas Commission.

The ads do not take a position on the proposed sale to UIL Holdings Corp. But Tasco is an avowed opponent of the sale, and critics say the ad sends an adversarial message.

"The ads are a waste of taxpayers' money," said Ellen Mattleman Kaplan, interim president of watchdog group the Committee of Seventy.

"If Council wants to prove its due diligence, it should have started the hearing process before leaving for summer recess and risking UIL Holdings walking away from the deal," Kaplan said.

Council in December requested proposals from consultants to advise it on the sale, and hired Massachusetts firm Concentric Energy Advisors at the end of March for $425,000. Concentric's proposal stated it would get the job done in less than two months.

"We are waiting with great anticipation for the report from Concentric and to look at its findings," said Mark McDonald, Nutter's spokesman. He said the administration was looking for "any kind of statement" from Council President Darrell L. Clarke on hearings.

Jane Roh, Clarke's spokeswoman, said he approved the Tasco ads because he "believes it is Council's responsibility to air a response to the administration's flurry of messaging in favor of a sale, particularly in light of the fact that the particulars of the bids are still being reviewed by Council's consultants."

Roh said the costs for the ads and Council's consultant were small compared with the $1.9 million of PGW funds that have been spent so far on financial, legal, and communications consultants related to the sale.

About $400,000 of the administration's budgeted sale costs are devoted to lobbyists and communications professionals, including $10,000 for a website,

UIL, a utility company based in New Haven, has run its own radio ad introducing itself to the Philadelphia market. It has not stated its plans after July 15, when it can back out. UIL has spent nearly $7 million on acquisition costs, including short-term financing.

"We are clearly heading toward a critical juncture in this deal and will have to make some hard choices," Michael A. West Jr., UIL's spokesman, said in an e-mail. "None of which UIL plans to take lightly."

West said UIL supports an open discussion about its bid and its experience.

"We certainly feel there has been ample time to review the merits of our proposal," he said.

The sale agreement terminates automatically on Dec. 31 if Council has not approved it.

215-854-2947 @maykuth

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