(Philadelphia, PA – April 13, 2005) –Last week, the Brookings Institute released a report, entitled, “The Price is Wrong – Getting the Market Right for Working Families in Philadelphia”. The report concluded that low-income Philadelphians pay more for goods and services on a regular basis, adding up to thousands of dollars more each year. The report identified PGW’s gas rate as an example of a higher-priced service.

Philadelphia Gas Works’ Chief Executive Officer Thomas Knudsen agreed, “PGW
does, in fact, have the highest gas rate in the state right now because rate calculations require all utilities to evaluate how many of its customers will be unable to pay their bills. The more
you have, the higher the rates have to be.” Currently, Philadelphia has 50 percent of the Pennsylvania Department of Public Welfare’s caseload and 75 percent of the long-term welfare caseload. More than half of PGW’s customers do not pay regularly.

The Brookings report offered a solution with regard to helping low-income customers pay their gas bills. It recommended that the state supplement the federal LIHEAP program. As of now, Pennsylvania is the only cold-weather state that does not have its own dedicated funding source to help low income customers pay their bills. Furthermore, the report recommended that all LIHEAP funds be restricted to primary heating sources only. Currently, LIHEAP funds can be used for primary or secondary heating sources. With natural gas serving as the primary
heating source for 80 percent of heating households, this recommendation alone would create an additional pool of $4 million to help low-income customers pay their gas bills.

“We have consistently said, to anyone who was willing to listen, that additional LIHEAP funds are critical. Sixty-five percent of a customer’s yearly bill is accumulated in the winter months and we want them to get the help they need before they fall behind in their bills,” added Knudsen. “Several of our state legislators are supportive of the idea and we are hopeful that it will be given serious consideration.”

Despite the daunting task of trying to collect from a base with an overwhelming number of low-income customers, PGW has been able to improve its collection percentage from a dismal 87 percent in 2003 to 94 percent in 2004.

PGW is the largest municipally owned gas utility in the nation and provides reliable service to more than 500,000 residential, commercial and industrial customers.