The ratings on Philadelphia Gas Works (PGW) reflect a supportive regulatory environment, a lack of competitors, and support from the City of Philadelphia. These strengths are offset by a weak liquidity position, persistently high accounts receivable, and a low, but improving, fixed-charge coverage measures. PGW, the largest municipally owned gas utility in the U.S. purchases, sells, and distributes gas to more than 500,000 customers within the city of Philadelphia. PGW has about $1.1 billion in total debt outstanding. The utility's regulatory environment has improved in recent years. Last year, the Pennsylvania Public Utility Commission (PUC) approved emergency rate relief of $36 million, which was rolled into a permanent base-rate increase of about $70 million in July 2002. The PUC also
