Pennsylvania

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City Council, PUC debate future of Philadelphia’s gas works

Philadelphia Energy Solutions CEO Phil Rinaldi, PGW CEO Craig White and City Council President Darrell Clarke share a moment before today’s hearings on the future of Philadelphia as an energy hub.

Katie Colaneri/StateImpact Pennslylvania

Philadelphia Energy Solutions CEO Phil Rinaldi, PGW CEO Craig White and City Council President Darrell Clarke share a moment before Thursday’s hearing on the future of Philadelphia as an energy hub.

Two days of hearings before Philadelphia City Council on the city’s energy future included talk of public-private partnerships and environmental stewardship. Meanwhile, Mayor Michael Nutter took his case for selling Philadelphia’s natural gas utility to a more sympathetic audience.

Philadelphia Energy Solutions CEO Phil Rinaldi warned the council they could hold the city back from becoming an East Coast energy hub if they don’t act fast on Philadelphia Gas Works.

“There is a famous window of opportunity to make that location Philadelphia, but make no mistake – competition is closing that window,” he said. “The first region that gets in manages to get the gold.”

While several council members say they would consider forming a partnership between the city and a private company, Rinaldi believes that would be a difficult and lengthy process. But he agreed that selling PGW to UIL Holdings Corp. is not the only way to maximize the utility’s potential.

“The development of Philadelphia’s energy future does not depend on whether PGW’s regulated residential gas business becomes privately owned or remains municipally owned,” he said. “The important issue here is how to best get the developable assets of PGW into constructive ownership.”

But Council President Darrell Clarke told Rinaldi he’s not eager to rush into a deal that he fears could ultimately cost city workers their jobs.

“You can’t make a bad decision because you believe the clock is ticking and the window is closing because I’ve been there, done that,” Clarke said.

One of the keys in the proposals to improve PGW is to increase use of gas from the Marcellus Shale and expand its liquified natural gas (LNG) facility. But those prospects upset environmentalists, including Sam Bernhardt of Food and Water Watch.

“Conjuring additional demand for shale gas would commit us to the risky proliferation of fracking elsewhere in Pennsylvania, including our watershed, the Delaware River,” Bernhardt said.

PGW already gets about 35 percent of its supply from the Marcellus Shale, with the remainder sourced from the Gulf Coast. The utility has also started selling some of its excess LNG for use in oil and gas drilling operations.

Council members continue their opposition to any sale of PGW, a move that Mayor Nutter advocates.

At a separate hearing convened by the Pennsylvania Public Utility Commission on Friday, Nutter declared there is no better deal for Philadelphia than UIL’s $1.86 billion offer.

“There are no losers here in this proposal and, yes, it can be made even better,” he said. “But let us move forward.”

Mayor Michael Nutter testifies about the future of PGW before the Pennsylvania Public Utility Commission.

Katie Colaneri/StateImpact Pennsylvania

Mayor Michael Nutter testifies about the future of PGW before the Pennsylvania Public Utility Commission.

The PUC has had regulatory oversight over PGW since 2000, and the commissioners made it clear they want the utility in private hands as much as Nutter does.

Commissioner Jim Cawley says PGW has improved in the last decade, but it’s time for a change:

“We’re now on the verge of that change, and I, for one, don’t want to go back to leaving it in the hands of people that have to be elected,” he said.

Click here to listen to a conversation between NewsWorks/WHYY’s Tom MacDonald and StateImpact Pennsylvania’s Katie Colaneri about the hearings. 

NewsWorks/WHYY’s Tom MacDonald contributed reporting.

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