An announcement is expected to be made Wednesday on the sale of Philadelphia Gas Works.
Wednesday marked an important deadline in the proposed purchase of PGW by the UIL Holdings Corporation, a New Haven-Conn.-based energy company. Since Philadelphia City Council did not take action on the plan ahead of the 11:59 p.m. Tuesday deadline, UIL can walk away from the deal without any repercussions.
UIL officials are set to make an announcement Wednesday morning, likely before stock markets open, about its proposed purchase. A city spokesperson told NBC10 that officials are still optimistic that UIL would stick with the deal despite the Council's inaction.
Last March, the city reached a $1.86 billion deal to sell Philadelphia Gas Works after more than 175 years of city ownership.
PGW President and CEO Craig White joined Philadelphia Mayor Michael Nutter to officially announce the proposed sale of PGW to UIL.
“When I announced nearly two years ago that the city would begin exploring the sale of PGW, I pledged that I would sign an agreement only if the terms benefited Philadelphia taxpayers and PGW customers,” Nutter said last March. “This agreement accomplishes those goals and much more. UIL submitted the highest bid for PGW and agreed to contract terms that were important to the city.”
The city launched a website www.exploringasale.com to answer any questions about the deal.
Currently Philadelphia is the largest American city to own a gas utility.
PGW is the nation's largest municipally-owned gas utility with more than 500,000 residential, commercial and industrial customers and more than 1,600 employees, according to officials.
If the deal is approved, the city will use the sale money to pay off PGW’s bond obligations and liabilities – including fully funding the PGW pension plan. Nutter said he expects another $424 to $631 million to remain left over. That money would be put towards funding the city employee pension fund, which is currently less than 50 percent funded.
Hundreds of millions of dollars from the sale of PGW’s assets will be injected into the city’s struggling pension fund, Nutter said.