The ratings on Philadelphia Gas Works' (PGW) bonds reflect an improvement in liquidity after the approval of an emergency rate relief by the Pennsylvania Public Utility Commission (PUC), the City Council's decision to defer repayment of the working capital loan, and improvement in collection efficiency after the moratorium period was lifted. These strengths are offset by PGW's problems with high account receivables, projections that assume normal weather conditions, which have not been realized in recent years, and weak 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. At fiscal year-end August 2001, PGW had about $900 million of debt outstanding. The
