The ratings on Philadelphia Gas Works' (PGW) bonds reflect below-average collection rates, high debt levels, thin coverage of aggregate debt service, and a marginal liquidity position. These weaknesses are partially offset by a lack of competitors and modest levels of support from the city of Philadelphia, Pa. PGW is the nation's largest municipally owned gas utility serving about 498,000 customers in Philadelphia. As of April 2004, the utility had about $1.23 billion in total debt outstanding. The utility's weak service territory and low collections strain available liquidity. Demographics in the service territory are weak with a declining population and below-average wealth levels. PGW typically collects only 92% of billed revenues. Collection problems reduce the efficacy of the utility's gas cost
