PGW.
What did you think I was going to say? Pat's vs. Geno's?
Anyway, the big news is that, thanks to the Pennsylvania Utilities Commission, those of us who are customers of the city-owned gas company are going to be spared large rate hikes this winter in favor of slightly smaller rate hikes. (DN, Inky, WHYY News)
So this is good, right? Not so, according to a Daily News editorial that anticipated this decision a couple days ago:
Despite the improvements in its management, collections and operations, the company, with its huge population of low-income ratepayers, has few options for stabilizing its operations.
That's why it has requested a large rate increase from the Public Utility Commission, which is expected to make a decision next week. PGW is requesting a rate increase of $100 million, which translates into about a 9 percent rate boost for its customers. PGW wants to use part of this increase to pay down its debt and help the company become more stable over the next five years. This could also make the utility attractive to a buyer.
But a recommedation to the PUC made by a group of its administrative law judges calls PGW's proposal fatally flawed, and recommends a rate increase of only $25 million.
We hope the PUC does not adopt this recommendation.
The PUC followed through with the $25 million increase, keeping PGW from being able to retire any of that debt and probably makes it need to take on more debt.
So what did the chairman of the PUC suggest that the city do with PGW after denying a rate increase that would help make the gas company more attractive to a potential buyer:
The chairman of the state Public Utility Commission said yesterday that the real cure for the debt-ridden, city-owned Philadelphia Gas Works is to sell it.
"This is a classic case of a company that needs to be acquired in order to work out its financial and operational problems," said Chairman Wendell F. Holland. "That's the big picture and until that happens, PGW will remain Philadelphia's number one energy issue."
What kind of organization would pay the amount of money the city would require for such an baggage-ridden, underperfoming, unpredictable product?
Comments (4)
I didn't think it was Pat's vs Geno's but I was wondering what was going to have me " BURPING " oh ! shucks excuse me :-)
Sell PGW.
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