By Mike Dunn

PHILADELPHIA (CBS) — Mayor Nutter is putting the Philadelphia Gas Works on the market.

The mayor’s announcement today follows the release of a study that found selling the natural gas utility makes sense for the city.

The study by the financial consultancy Lazard Ltd. — commissioned by the city and more than a year in the making — concludes that selling PGW could bring in more than enough to pay off PGW’s debts, which are put at $1½ billion.

And Lazard says the sale could bring customers better service and reduced cost.

With these findings in hand, Mayor Nutter is beginning what could be a two-year process to find a buyer of what is the largest municipally owned utility in the country.

“We are surely at the beginning of a tremendously complicated process,” the mayor noted, “one that could strengthen city government on behalf of the taxpayers while at the same time providing a brighter future for the ratepayers.”

Nutter says any sale would come with a long list of conditions, including job protections for PGW’s 1,100 unionized workers.

But Keith Holmes, president of Local 686 of the Utility Workers Union (below), says the sale of PGW is a no-go for his group.

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(Keith Holmes of the UWUA. Credit: Mike Dunn)

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“We’re actively going to fight it,” Holmes told KYW Newsradio this afternoon.  “We’re going to talk to (City) Council.  But I’m willing to sit down and talk to the mayor if it comes to that.”

Among the additional conditions that Nutter says he would attach to a sale would be a rate freeze through August 2016, and a mandate that PGW’s corporate headquarters remain in the city for a period of time to be determined.