By Mike Dunn
PHILADELPHIA (CBS) – Philadelphia City Council continues to put the mayor’s plan to sell PGW under a microscope. The lawmakers have now hired a utility industry consultant to analyze the proposal.
City Council has hired a Massachusetts firm called Concentric Energy Advisors to analyze the winning PGW bid, as well as the losing bids and the entire concept of the sale.
Council President Darrell Clarke says they’re starting at square one, “One of the things that we need to know is to understand what the company is actually worth, prior to making an analysis of a particular bid. We simply don’t know.”
The mayor has chosen a Connecticut firm called UIL Holdings to purchase PGW for nearly $2 billion, with about a quarter of the proceeds going to prop up the struggling city workers pension fund (see related story). Both Council and the state Public Utility Commission must approve the deal.
Clarke will not say when he expects the work of the consultant to be complete. “We’re not necessarily, from our perspective, on a time clock.”
UIL could back out of the deal if it’s not approved by mid-July. Clarke does not seem concerned: “That’s not a document that I signed.”
City Council’s contracts with its consultant will cost a minimum of $425,000. The Council President says that’s a worthwhile cost: “I believe it is, clearly. You don’t want to enter into a transaction without having the opportunity to analyze it. This is a $1.86 billion proposal. If it takes us $400,000 to make sure that we make the appropriate decision, I think that’s money well spent. We didn’t initiate this. The Administration made the determination that they wanted to sell PGW. And I believe that on that part of the transaction, they spent upwards of $2 million. So the $400,000 plus on our behalf will be money well spent.”
Clarke has already requested large amounts of background of how UIL was chosen as the winning bidder. When asked if the Nutter Administration has so far been sufficiently responsive to those requests, Clarke said, “They have been responsive.”