By Mike Dunn
PHILADELPHIA (CBS)–Final bids are due at the end of this month from companies that are vying to purchase the Philadelphia Gas Works from the city.
City Council members must approve any deal, so now the lawmakers are hiring consultants to evaluate both the final bid and the entire concept.
City Councilwoman Marion Tasco, who sits on the Gas Commission, says Council will hire two consultants with differing tasks. One will assess the final bid chosen by the mayor the other will take a step back and evaluate whether a sale of PGW is a good idea.
“We can’t make that decision based on the opinion of the mayor’s (consultant) who is promoting the sale of PGW. We need to have our own independent look at the whole issue. We just can’t rubberstamp what the Administration sends to us.”
The mayor’s consultant, Lazard Frères & Co., predicts a potential sales price of between $1.45 billion and $1.9 billion dollars and believes the sale would benefit the city and taxpayers.
Aides to the mayor say proceeds from a PGW sale could shore up the city worker pension fund and improve, overall, the city’s struggling finances.
Tasco, though, has already made up her mind — she is opposed, “It doesn’t make sense. For me personally, it doesn’t make sense to sell the PGW.”
Tasco says she is concerned about the effects of a sale on ratepayers.
The Administration contends that rate increases will be minimized by a sale, since a private firm could expand into other areas that PGW now cannot.
Despite her opposition, Tasco insists that the consultants hired by Council will not skew their assessments to match her stance.
“I want an independent, well-thought-out assessment, without any of my thoughts or influence being in the process. Each member of City Council will have to look at the (mayor’s) proposal, and through discussion decide whether or not it’s in the best interest of the city to get rid of a valuable asset such as PGW.”
A spokesman for the mayor, Mark McDonald, says the mayor understands Council’s need for separate consultants.
“City Council has the right and obligation to engage in appropriate levels of due diligence and study on this very important question.”
The Administration in November said that 30 companies originally expressed interested in buying PGW.
A smaller number of firms to submit final bids, though officials won’t say how many, and those bids are due by January 31st.
At some point in the spring, the mayor is expected to transmit legislation to Council containing terms of the deal.
The approval of the state Public Utility Commission is also needed for the sale to proceed. The cost of the consultants has not been determined, according to an aide to Tasco.
PGW is the largest city-owned utility in the nation.