NEW YORK (Standard&Poor's) July 9, 2004--Standard&Poor's Ratings Services said that the Pennsylvania Public Utilities Commission's (PUC) decision yesterday to reject Philadelphia Gas Works' (PGW) request to establish a special surcharge to help defray the cost of its uncollectible billings is another unfavorable development for PGW's credit quality. The investment-grade rating on PGW's senior revenue bonds (BBB-/Negative) remains tenuous. Still, the PUC's decision in and of itself does not have an immediate impact on the ratings on PGW. However, it highlights the difficulty of PGW's financial situation, which could lead to lower ratings in the near term. The ratings on PGW have historically benefited from a supportive relationship with the PUC. The PUC's recent decision points to
