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Fitch affirms PGW’s bond rating at BBB+, while Moody’s says PGW’s outlook is “stable”
Philadelphia Gas Works’ (PGW) bond rating outlook by Fitch Ratings has improved to “positive” from “stable.” Fitch also affirmed PGW’s bond rating at BBB+.
Fitch noted that PGW’s “strong operating risk profile assessment is based on PGW's well-identified cost drivers (including labor costs and contracted purchases for natural gas supply), an ability to manage costs with shifts in demand, and manageable capital pressures.” The analysis also stated that “Fitch assesses PGW's financial profile to also be strong reflecting historically stable financial results that have improved over the past two years, leading to a lower leverage ratio of 5.1x in 2019.”
In addition, PGW’s bond rating from Moody’s Investors Services was affirmed at A3 with a stable outlook. In its ratings rationale, Moody’s noted that PGW has “sound management that has enhanced PGW's operating efficiencies and resulted in recurring cost savings that have led to a more stable and more predictable financial position that is expected to be maintained.”
“PGW’s positive bond outlook from Fitch and Moody’s rating affirmation reflects our longstanding efforts to manage costs and provide safe, reliable, and affordable gas service for residents and businesses in the City,” said Craig White, President and CEO of PGW. “Our focus is to continue to operate safely and efficiently while investing in new infrastructure that ensures service reliability for years to come.”
In recent years, PGW has implemented a number of initiatives that reduced costs, increased efficiency and explored new income streams. Among these initiatives are PGW’s Long Term Infrastructure Improvement Program (LTIIP) for service reliability, and a proposed public-private partnership with Passyunk Energy Center LLC to market and sell liquefied natural gas, which has the potential to be a new revenue source. The project also proposes installing solar panels to help lower energy costs and reduce the net emissions of the new liquefier.
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To start, Company will track and share methane emissions reductions from pipeline replacement by 2022
PHILADELPHIA (April 21, 2020) – Philadelphia Gas Works (PGW) is pleased to announce its acceptance into the U.S. Environmental Protection Agency’s (EPA) Methane Challenge Program on the 50th anniversary of Earth Day. By joining the Challenge, PGW is voluntarily committing to lower its methane emissions by replacing at least two percent of its cast iron and vintage steel mains with newer, modern pipes, along with new service lines, every year by 2022.
As a partner, PGW joins more than 60 companies from all segments of the industry — production, gathering and boosting, transmission and storage, and distribution — to set targets and track and share their progress to reduce emissions and improve air quality. PGW will also work with the EPA and peer companies to learn and share knowledge about the latest technologies, industry trends and new industry initiatives.
“PGW intends to meet or surpass the goals set by the Methane Challenge and strengthen our commitment to environmental responsibility,” said Janelle Johnson-Grummert, PGW’s director of sustainability. “Participation in this program helps PGW continue to play a role in creating a healthier environment and improving essential services in the City.”
The Methane Challenge is the latest in PGW’s conservation and efficiency efforts. PGW’s main and service replacement program has reduced 78,000 metric tons of CO2e since 2005. Last year, PGW invested $87 million to modernize and replace 34 miles of its infrastructure. With each new mile of main installed, emissions were reduced to zero. Along with reducing methane emissions, pipe upgrades ensure the long-term safety and reliability of the overall natural gas distribution system in Philadelphia.
Sustainability is core to PGW’s business operations and its future. Just over the last 10 years, PGW has invested $60 million to weatherize 21,880 low-income customer homes and 22 multi-family buildings (with a majority of low-income tenants) in Philadelphia through Home Comfort, a free, low income usage reduction program.
PGW has also awarded more than 6,200 rebates and grants to residential, commercial and industrial customers at a cost of $10.7 million through its EnergySense Rebate Program. Collectively, the estimated resources saved over the lifetime of PGW’s conservation measures in Philadelphia homes and businesses is equivalent to 846,000 metric tons of CO2e, or planting over 13.9 million trees. To learn more about PGW’s conservation efforts, visit the Energy for All of Us page at pgworks.com.
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PGW encourages customers to enroll in payment assistance programs and apply for available grants
PHILADELPHIA, PA (March 13, 2020) – With the evolving response to the COVID-19 pandemic we understand that our customers may experience challenges or financial hardships as a result. Effective immediately, PGW is suspending non-payment terminations until May 1, 2020. PGW also plans to waive new late payment charges.
“PGW wants to support any of its customers that may be facing additional difficulties because of the COVID-19 pandemic and connect customers with the payment arrangements, programs, grants and other resources available to stay warm without worry,” says PGW CEO Craig White. “We are committed to assisting our customers so they can maintain gas service for heating their homes and providing meals for their families.”
PGW has a variety of assistance programs in place for customers to assist with their natural gas bill. Options like ‘Payment Arrangements’ (for when customers fall behind, or are worried they might) or ‘Budget Billing’ (which sets up a consistent pay amount each month) can make all the difference.
Other programs include:
· Crisis: A federal grant awarded to customers without gas service, or with a 10-day shutoff notice. This grant can be combined with LIHEAP.
· Customer Assistance Referral Evaluation Program (CARES): PGW’s CARES program provides payment assistance to residential customers with special circumstances. These might include medical emergencies, unemployment or other temporary hardships.
· Customer Responsibility Program (CRP): Allows low-income customers to cut their monthly gas bill.
· LIHEAP (Low Income Home Energy Assistance Program): A free grant ranging from $200 - $1,000.
· UESF (Utility Emergency Services Fund): A grant designed to pay off the balance of a customer’s unpaid utility bill and bring it to $0.
For low income customers LIHEAP funds are still available. The program closes April 10, 2020. If eligible, LIHEAP grants of up to $1,000 are available to both homeowners and renters. Customers can visit www.pgworks.com/liheap.
Our goal is always to work with customers and give them as much support as we can, in order to keep their vital natural gas service on. Whether the need is temporary or ongoing, our experienced team regularly works with customers who are in tough financial situations. We may also be able to direct customers to other services and sources of financial support, even if we don’t have a program to fit their need. People can find out more at www.pgworks.com or by following @MyPGW on Twitter.
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