Post on 18-Jul-2016
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Opinion / Editorial Submitted by: Douglas I. Oliver, Philadelphian For almost a year now, we have heard strong opinions regarding the Mayor’s plan to sell PGW. The Mayor and his team, City Council, the PUC, leaders of businesses large and small, consumer groups, unions and editorial boards have all opined on this momentous decision.
I work at PGW and, in my personal opinion, I believe the company should be sold to UIL. I came to that conclusion slowly, but from my perspective, there are three compelling reasons why selling is the right move for Philadelphia.
1. A sale will inject roughly $500 million in the City’s massively underfunded pension fund. That won’t solve our pension problem by any means, but it gives a little breathing room and it’s a lot better than the alternative. For those who don’t like the idea of selling PGW to generate this one-‐time infusion of cash, I ask – what is the alternative plan to address the pension fund issue that brings more than $500m? To date, no other ideas are on the table that I am aware of. Consider that, right now, more than two out of every five dollars the City spends goes to cover pension and healthcare costs and that number is only expected to grow. As it grows, there remains less and less money available for critical City services like recreation centers, libraries and other services that the City needs to thrive. To ignore the crisis just brings us closer to a disaster scenario that none of us wish to fully contemplate.
2. A privately owned PGW can take more advantage of current and future market opportunities. A private company has access to capital that PGW just doesn’t have. Getting money from shareholders rather than from ratepayers means that the investment risks are not born by the people who can least afford it. Because of this, a private company has a greater ability to play an integral role in creating the energy hub that can bring manufacturing jobs and other high paying, skilled and unskilled jobs back to the City, putting Philadelphians back to work, strengthening our tax base and freeing up precious dollars to address other pressing needs like improving our schools.
3. A privately owned company has the ability to upgrade our underground infrastructure in half the time and at a lower cost. The more cast iron pipe that can be removed from the ground, the safer and more reliable our system becomes.
City Council has voiced its concerns about what happens to PGW employees. And as a PGW employee, I appreciate that relentless concern for what happens to us. Council is also concerned with what happens to low income programs and I agree that those are the right questions to be asking as well. Council has said it won’t be rushed into a bad situation which also makes perfect sense.
But from everything I can tell, UIL is either offering these protections or has publicly committed to making whatever changes are necessary to give Council comfort that their concerns have been addressed. If this was not clear, it should have been and we can thank Council for their diligence. I am also encouraged that UIL has expressed its willingness to engage with PGW’s hard-‐working Local 686 to ensure that their concerns are addressed.
We’re almost there. I am hopeful that the Administration, City Council, the business community, unions, UIL and other interested parties will continue discussions about the proposed sale. We have a golden opportunity before us, but we need to work together to make it happen.
Finally, I encourage all candidates and would-‐be candidates to chime in on this sale discussion. This much is clear -‐ whoever the next Mayor is will have to deal with pension challenges and I think it’s reasonable that candidates make their opinion on the PGW sale known so that it can be factored into the current decision making process.