[eldondre]

Originally Posted by billy ross

Starting with a $1.2 billion debt and in five years having an $800 million debt is not shuffling money around. What on earth are you talking about.

don't be deliberately dense. Getting all the debt off its books is shuffling money around, specifically from its books to to some third party, is the PIDC.

For PGW, the legislation would allow a third party with better credit, such as the Philadephia Authority for Industrial Development, to sell bonds to finance its improvements. The PUC would issue an irrevocable order allowing PGW to recover interest and principal payments through a surcharge on bills.

The lower issuance cost and interest rates would save the utility $63 million over 30 years for each $100 million borrowed, PGW says. The arrangement would also get the debt off PGW's bloated balance sheet.

that's not to mention from y pocket to theirs.

However, it bothers me more to have a gas company with a $1.2 billion debt and which is essentially insolvent.

It bothers me too and at least he's finally trying to address it since the politicians don't seem inclined to.

Originally Posted by billy ross

It means that the pain will recede as the gas company gains back its financial health.

it means there's hope, nothing is inevitable.

Originally Posted by billy ross

Pennsylvania ingeniously allowed PE to recover its sunk costs in the power plants while allowing competition (and price-fixing) to cause PA's electric rates to drift lower and lower (I think mostly via inflation). 30 years ago Philly had the highest electric rates of any city in the USA. Now we have among the lowest (but not for much longer - our rates are scheduled to float soon). I see the model repeating itself with PGW, and I can't be happier.

there's really nothing similar about those two situations at all. Also, I've heard PECO increases will be lower than much of the rest of the state because PECO rates are generally higher than, say, PPL. AFAIK, our rates are half that of New England, less than NY, and more expensive than sunbelt states. PECO is now benefitting from low cost power from paid off nuclear plants, PGW will still have outdated equipment, buy spot market power, and ceteris paribus, have an expensive cost structure.

Originally Posted by billy ross

The insane gas bills I paid last winter shouldn't go up by much over the next five years, as last winter was one of the fiercest on record. I am also hoping that I am already paying the emergency increase, as opposed to waiting for it to kick in (I am pretty sure I have already been paying it).

A lot of that will depend on gasprices and what their capital needs are I would imagine.

as for natural gas, we need the price to increase a bit. Penn sits on one of the largest natural gas reserves in the world AFAIK but it's expensive to extract...so we need prices to remain elevated. If other pices increase, the relative price is more competitive.