Philadelphia Energy Solutions CEO and Chair of the Greater Philadelphia Energy Action Team, Philip Rinaldi, comments on rejection of PGW sale
31 Oct, 2014, 12:57 ET
PHILADELPHIA, Oct. 31, 2014 /PRNewswire/ -- As the CEO of Philadelphia Energy Solutions and Chair of the Greater Philadelphia Energy Action Team I am frequently and passionately advocating for the development of Philadelphia's energy infrastructure to take advantage of the proximity of Pennsylvania's abundant Marcellus Shale natural gas reserves. Given the age and condition of our current energy infrastructure, a substantial amount of investment is required in order to stimulate a rebirth of a regional manufacturing based economy. Anyone familiar with these issues knows that time is of the essence. So it is little wonder that, in light of Monday's announcement that the prospective privatization of Philadelphia Gas Works was being rejected, so many people have reached out to me to ask if that rejection doesn't portend the end of the local energy opportunity.
Although the rejection of the proposed UIL purchase of PGW is obviously discomforting, I personally have meaningful hope that what might evolve over the next several weeks will not only reclaim the advantages of that prospective sale, but might even result in a form of transaction better for all parties.
Powerful political leaders like Mayor Nutter and City Council President Clarke have each convinced me that they believe in an energy-centric future for Philadelphia and that the local government is ready and willing to be proactive in reaching those goals. They, along with several well-placed and deeply concerned business and labor leaders are presently working together to explore ways to evolve a PGW transaction. Working out the particulars is, of course, the responsibility of the Mayor and City Council, and I for one believe that those efforts should be made and even intensified in the very near term.
Although I am not privy to the specifics of the UIL offer to purchase PGW, the public accounts highlight several key advantages:
- Speeding up the needed replacement of the ancient and suspect cast iron and unprotected steel pipes. With PGW under municipal control, that pipe replacement is slated to take 88 years. That sounds like a very long time. UIL would cut that time in half.
- Sale of PGW as is could fetch $1.86 Billion for Philadelphia. That sounds like a lot of money.
- And some of the assets of PGW, like their LNG facilities and their hub infrastructure could be profitably exploited if in private hands. UIL has the access to capital and experience to get this done at an accelerated pace.
Mayor Nutter and City Council President Clarke are good men who care deeply about the well-being of Philadelphia. I am putting my trust in their continued endorsement of an energy-centric future for Philadelphia. Saying that, a meaningful dialogue between them, involving the core group of stakeholders mentioned above, should be given the highest priority.
About Philadelphia Energy Solutions
Philadelphia Energy Solutions, a joint venture between The Carlyle Group and Sunoco (now part of Energy Transfer Partners), owns and operates the Point Breeze and Girard Point oil refineries located on an integrated, 1,440 acre refining complex in Philadelphia. The 330,000 barrels per day of combined capacity makes PES the largest refining complex on the Eastern Seaboard.
For further information contact:
Cherice Corley 215-339-7061
SOURCE Philadelphia Energy Solutions
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