A new twist in the idea of selling PGW:
Why would we sell PGW when demand for natural gas distribution to homes and businesses is about to sky-rocket due to widespread adoption of gas-powered micro-co-generation using natural-gas fueled micro combined heat and power (mCHP), even while PGW has infrastructure spare capacity to take up this increased distribution load to customers?
Assuming it would take 2-4 years to close a sale, by then, mCHP, fueled by natural gas, will likely be all the rage, replacing increasing swaths of centralized electricity generation throughout municipalities that have natural gas service. With enhanced energy independence and blackout proofing, and an anticipated 10% savings on levelized electricity and home heating costs, thousands of Philadelphians will be switching from dirtier coal or dangerous nuclear and other sources in the default mix of grid-supplied electrical power. Gas demand could eventually — ? — triple. Whoever owns PGW’s infrastructure at that point, will have tripled revenues with only marginally-increased maintenance costs — a classic boon from economies of scale in the delivery of goods.
This is not a good time to sell PGW, our cooperatively-owned gas distribution system
It’s a good time to double down and invest in maintaining our infrastructure and making sure it can deliver more gas to all these new mCHP generating plants.
I suspect that energy companies (such as Exelon) are diversifying into all energy sources, and want to grab the Philadelphia market for gas by buying PGW before City residents are able to slip from out of their coal pockets into something a bit cleaner and owned by the people. Exelon could be looking at losing 1/4 of its market in direct electrical energy distribution to mCHP, and therefore wants to have a piece of the intermediate energy distribution pie in the form of natural gas.
Although plans to sell PGW have been in the works for years (that’s right YEARS!), Philadelphia Inquirer reported on the story most recently at:
Even if we sold only the LNG terminal, we’d be selling our ability to stabilize natural gas prices using reserve capacity there — and our ability to bargain effectively with suppliers. How seriously are they going to take us if we’re hooked straight to pipeline without any buffer capacity, and 1/3 of our buildings rely on natural gas for operating mCHP plants?
- US DOE Energy Efficiency & Renewable Energy (EERE): “Meeting 21st Century Residential Energy Needs” (including micro-combined heat and power, or mCHP)
- Honda releases MCHP mCHP product for residences, 2007
- Wikipedia: mCHP and the Honda/Climate Energy “Freewatt” bundled system for US northeast customers
- Fuel cell combined heat and power
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