The ratings on Philadelphia Gas Works' (PGW) reflect the base rate increase by the Pennsylvania Public Utility Commission (PUC), the Philadelphia city council's decision to extend repayment of the working capital loan, and the inclusion of a weather normalization, which has resulted in a marginal improvement in liquidity. These strengths are offset by PGW's problems with high accounts receivables, a poor liquidity position, and low, although improving, fixed-charge coverage. PGW, the largest municipally owned gas utility in the U.S., purchases, sells, and distributes gas to more than a half-million customers within the city of Philadelphia. Philadelphia Gas has about $965 million of outstanding debt. The ratings reflect the following strengths: A favorable ruling from the PUC granting approval of an
