Greens Stand Against Sale of Philadelphia Gas Works (PGW)

The City Committee of the Green Party of Philadelphia (GPOP, www.gpop.org) has taken a firm stand against the sale of Philadelphia Gas Works (PGW). Green Party leaders say that Mayor Michael Nutter has failed to make his case in favor of selling PGW to the highest bidder.

Since 1836, the Philadelphia Gas Works (PGW) has provided our citizens with gas for many purposes. Currently, PGW has more than 514,000 customers. PGW is the largest municipally-owned gas utility in the U.S., and the utility’s 1,654 employees are required to live within Philadelphia, where they are part of the city’s tax base.

When Nutter slapped a “FOR SALE” sign on PGW, Green Party leaders questioned this move. “After all,” said GPOP Chair Vivek Ananthan of Northern Liberties (Ward 5), “PGW pays the city an $18 million franchise fee each year.”

Nutter is so sure that he can sell PGW that he has already begun hiring lawyers, financial advisors, lobbyists and communications specialists to work on the sale. Next, he plans to hire a broker to handle the nitty-gritty of the sale.

Green Party leaders point out that no one yet knows how much the preparation for a sale will cost Philadelphia, but Nutter does want PGW’s customers to pay for this expense. That idea does not sit well with members of GPOP’s City Committee. Nor does it have the agreement of the Philadelphia Gas Commission, which offered the following statement to the press, “We have grave reservations about the wisdom and appropriateness of such expenditures and how they would be of benefit to PGW’s customers.”

Before taking this stand, Philadelphia’s Greens looked at the “Strategic Assessment” of the PGW sale prepared by Lazard Frères, and released by Nutter in February 2012. The Lazard assessment says that no sale will take place unless the new owner will honor the union contract, which expires in 2015.

Carol McLean, a GPOP City Committee member from Germantown (Ward 59), is worried about the effect of the sale on PGW’s workers. “Privatizing PGW is clearly an attack on union members,” said McLean. “Gas Workers Local 686 helped PGW get back on its feet by making significant concessions in their last contract. Apparently, Mayor Nutter did not appreciate their effort. Eliminating union jobs with benefits is not a fiscally sound policy. When Nutter is done slashing and cutting municipally-owned services, who will be left standing?”
Sale of PGW may also have a particular effect of low-income consumers. The Lazard Assessment says that Philadelphia will require PGW’s new owner to honor PGW’s “Senior Citizen Discount Program and to preserve all PUC-mandated discount programs currently in place.” This is not enough to satisfy McLean, who warns, “Once PGW is privatized, there is absolutely no assurance that the new owner will honor subsidized rates for low-income and elderly consumers.”

Chris Robinson, a GPOP City Committee member from Germantown (Ward 59) said, “Lazard made an attempt to analyze the outcome of selling PGW, but their report is quite full of holes. For instance, the Lazard Assessment says, ‘Under any privatization scenario, it is unclear whether tax revenues from a privatized PGW would exceed or be lower than the $18 million franchise fee.’”

The Lazard Assessment further concludes, “A successful privatization of PGW would require that the City develop a plan to build broad support from the City Council, City Administration, Commonwealth officials, the PA PUC and PGW Management. Such support is critical to convincing potential acquirors (sic) that a sale process would be a worthwhile allocation of time and resources.”

“Please note that Lazard did not call for building the broad support of PGW’s unions and customers or of City taxpayers,” pointed out GPOP City Committee member John Gonzalez of Fairhill (Ward 19). “Their assessment does call for a publicity campaign to deal with their opponents: ‘A privatization process should also incorporate a comprehensive strategy addressing the concerns/positions of each PGW stakeholder (e.g., ratepayers, City taxpayers, unions, PA PUC, Buyer, etc.).’”

The Green Party has historically been opposed to privatization, the process of transferring ownership of a public service or property from the government to a for-profit business or to a non-profit organization. Specifically, the Green Party platform says that Greens stand “firmly opposed to privatization and contracting-out of public services. A government that works for us would provide critical goods and services that should not be run for profit.”

“Privatization of basic utilities is the most egregious example of erring on the side of profit for the few at the expense of the needs of the many,” said Belinda Davis, GPOP Treasurer from Chestnut Hill (Ward 9). “After the most recent examples of corporate greed and its disastrous effects, why would the city even think of selling PGW, except as a short-term budgetary fix? This is short-sighted in the extreme, and the residents ofPhiladelphia will have to pay for it.”

Because of their political analysis, the Green Party has supported campaigns against the privatization of public education, water supplies and other natural resources, parks and recreation, the military and police, libraries, broadcast airwaves, prisons and Social Security. Most recently, the Green Party of Luzerne County took a stand against privatization of parking lots in Wilkes-Barre, PA.

The Green Party of Philadelphia is an independent political party which stands for ecological wisdom, social justice, grassroots democracy, non-violence. For more information about the GPOP, please contact 215-243-7103 and gpop@gpop.org.

Contact: Chris Robinson
215-843-4256 and chrisrecon@netzero.net


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