Philadelphia Mayor Michael Nutter announced March 3 the city would be selling its gas utility Philadelphia Gas Works to UIL Holdings Corp. (NYSE:UIL). The $1.86 billion deal will bring in at least $424 million to the city's pension fund, The Associated Press reported. The deal also "positions PGW to take full advantage of the abundant supply of natural gas in Pennsylvania to make our city and region a prime energy hub," according to the source.
Founded in 1836, Philadelphia Gas Works manages a distribution system of approximately 6,000 miles of gas mains and service pipes supplying approximately 500,000 customers in the city of Philadelphia.
UIL Holdings is based in New Haven, Conn., and currently has about 706,000 customers that it provides electric and natural gas services to throughout Connecticut and Massachusetts. After taking over PGW, it will serve more than 1.2 million gas and electric customers, including nearly 900,000 gas customers with proximity to abundant regional gas supply in the Marcellus and Utica shales.
UIL will maintain PGW Operations headquarters in Philadelphia and its six Customer Service Centers around the City. Upon close of the transaction, UIL will maintain dual corporate headquarters in New Haven and Philadelphia.
The deal will require approval from the Philadelphia City Council and Pennsylvania Public Utility Commission before it is finalized. UIL said it anticipates closing by the first quarter of 2015.