Letter: UIL is winning bidder for PGW sale
The Nutter administration has chosen a Conn. firm to buy the gas utility, according to a letter.
/arc-anglerfish-arc2-prod-pmn.s3.amazonaws.com/public/Z2Q6CRMPWRFHBMCM7LONO6DQUQ.jpg)
MAYOR NUTTER'S administration has selected UIL Holdings Corp. as the winning bidder for the sale of Philadelphia Gas Works, according to a letter from a lawyer representing a rival bidder that was obtained by the Daily News.
UIL, of New Haven, Conn., is the parent company of United Illuminating Co., Southern Connecticut Gas Co., Connecticut Natural Gas Corp. and Berkshire Gas Co., according to its website.
Administration officials declined to confirm or deny the choice of UIL.
Privatizing PGW, the country's largest municipally owned gas utility, is a major second-term priority for Nutter, who has proposed dedicating the proceeds to the city's beleaguered pension fund.
The letter obtained by the Daily News was from Cozen O'Connor lawyer Steve Cozen, who represented Liberty Energy Trust. It did not include the price or terms of the UIL deal.
Cozen could not be reached for comment.
The sale will require approvals from the state Public Utility Commission and City Council.
Council is in the process of hiring two consultants to help it evaluate the sale - one to vet the bids and another to explore alternatives to selling the utility.
Opponents of a sale include Councilwoman Marian Tasco, who chairs the PGW commission, the union for the utility's employees and those who are skeptical that a sale will be worth giving up the $18 million the city gets from it every year.
A city-hired consultant said last year that the sale would fetch between $1.45 billion and $1.9 billion and, after substantial debts and other obligations are paid, would net the city a profit of $422 million to $872 million.
Nutter has said that now is the perfect time to sell PGW, which in recent years rebounded from the brink of insolvency.
Philly is the only big city on the East Coast that still owns a gas utility.
The mayor's deputies have argued that the loss of the $18 million PGW fee to the city will be made up by a decrease in the city's required pension costs, assuming that the sale proceeds go to the retirement fund.
The administration methodically vetted the numerous bidders for the sale this fall and winter, and rumors have been swirling for weeks about the selection.