The rating on Philadelphia Gas Works (PGW) bonds reflect the following weaknesses: Rate inflexibility due to historic problems getting rate relief from the Philadelphia Gas Commission, Poor liquidity due to high but improving levels of uncollectable accounts and the required annual city payment, Aggressive future projections which assume normal weather conditions that have not been realized in recent years, and An increased reliance on debt financing to support the capital program. These are offset by the following strengths: Sound legal provisions, which require, on an accrual basis, 1.50 times (x) coverage on the senior bonds, in spite of the lowered revenue requirement from the creation of a subordinate lien. A portion of these bonds will be issued under the 1974
