EXPLORING THE NATURAL GAS UTILITY INDUSTRY

Reflections After PGW Internship

Talaial Alina

NATURAL GAS INDUSTRY•Local natural gas utilities – part of a complex energy supply chain•More than 1,200 natural gas utilities in the United States•Operates an extensive system of 2.4 million miles of pipelines for 177 million Americans•Services 72 million homes and businesses•Natural gas makes up 25 percent of the energy consumed in the United States (24.64 trillion cubic feet or Tcf in 2010) (AGA)

UTILITIES AND NATURAL GAS DISTRIBUTION

 •Local natural gas utilities represent the final step in the natural gas delivery process.

•Utilities receive their natural gas supply through “utility transfer stations”

•Transfer stations are maintained by the local natural gas utility

•After the natural gas passes through the transfer station, the local gas utility moves the gas through a 2.4 million mile network

•The distribution network includes measurement and pressure regulators - maintained by the local gas utility

UTILITIES AND NATURAL GAS DISTRIBUTION

•Local natural gas utilities do not earn a profit on gas deliveries.

•Instead, utilities earn a profit on the delivery service they provide to customers.

•Included in this cost is maintenance, upgrades of the pipes that deliver natural gas to your home or businesses and other costs

•Utility-funded efficiency programs and income assistance to moderate energy costs

February 8, 1836 - first employees of the newly formed Gas Works lit forty-six lights along Second Street.

Managed by Philadelphia Facilities Management Corporation (PFMC).

Today PGW is the largest municipally owned gas utility in the country. ◦ 6,000 miles of gas pipes that deliver 78 billion cubic

feet of natural gas to 500,000 customers each year.

PHILADELPHIA GAS WORKS (PGW)

PHILADELPHIA GAS WORKS (PGW)

The Company is primarily a natural gas distribution company.

Operating revenues include: sale of natural gas to residential, commercial, and industrial heating and non-heating customers.

The Company also provides natural gas transportation service. Appliance and other revenues - Company’s parts and labor

repair program. Add. revenue generated from collection fees, reconnection

charges, and Liquefied Natural Gas (LNG) sales contracts. Other operating revenues consist of charges on late

accounts.

PHILADELPHIA GAS WORKS (PGW)

Total revenue in FY 2014: $759 million Total operating expenses, including

fuel costs, in FY 2014: $638.3 million Total excess of revenues over

expenses in FY 2014: $49.3 million

REGULATION OF PHILADELPHIA GAS WORKS (PGW)

• Prior to July 1, 2000, the Company was under Philadelphia Gas Commission (PGC).

• Effective July 1, 2000, Pennsylvania Natural Gas Choice and Competition Act made PGW under Pennsylvania Public Utility Commission (PUC).

• The PGC approves Company’s Operating Budget and reviews its Capital Budget. City Council approves PGW Capital Budget.

• The Company, as of September 1, 2003, is operating under its Restructuring Compliance Tariff.

PGW ASSETS

Accounts Receivable – In FY 2014, accounts receivable (net) of $101.5 million, the accumulated provision for uncollectible accounts - resulted from a robust winter heating season.

Capital Improvement Fund, Workers’ Compensation Escrow Fund, and Health Insurance Escrow Fund – The Capital Improvement Fund decreased by $44.1 million in FY 2014 because of fund withdrawals fpr capital expenditures.

Information technology enhancements, and other general improvements were $80.2 million in FY 2014.

PGW LIABILITIES

Long-Term Debt – Long-term debt, including the current portion and unamortized discount and premium, totaled $1,034.0 million in FY 2014.  

Short-Term Debt –The letters of credit supporting PGW’s combined commercial paper programs fixed the maximum level of outstanding notes plus interest at $120.0 million in FY 2014

PGW COMMUNICATIONS DEPARTMENT

•During a typical day at work:▫service the various needs of the departments within PGW

▫help departments draft messages

▫externally respond to customer issues

PGW COMMUNICATIONS DEPARTMENT OBJECTIVES

• Ensures departments and customers can maintain their level of satisfaction. strive to provide leadership convey what CEO and others are trying to achieve

create a strong partnership between PGW and the public

PUBLIC AFFAIRSDirector of Public Affairs - Melanie McCottry

Public Affairs Manager - Kelli E Richards◦Manage external affairs for PGWcreate press releasesanswer media questions regarding PGW

INTERNAL COMMUNICATIONS

Manage executive communications with the bulk of employees

Determine public outreach strategies to increase sign-ups for programs like LIHEAP

Maintain newsletters: Blueflame and Good Gas News

INTERN AT COMMUNICATIONS

DEPARTMENT Delivered mail to

employees throughout the main PGW headquarters

Delivered the original graduation photos to employees who had sent them in to be included in the internal Blueflame Graduation Issue.

Framed graduation photos to deliver to employees.

For the Director of Public Affairs, researched the programs Neighborhood Advisory Committees (NACs) offered

For the External Communications Manager, researched PGW’s public websites to develop tweets

For the Internal Communications Manager, researched internal communications strategies, Focused on the Federal Reserve Bank of

Chicago’s successful communication plan

INTERN AT COMMUNICATIONS

DEPARTMENT

ISSUES ENCOUNTERED AS AN INTERN

Internal: Lack of feedback from management on employee

projects Feelings of stagnation among employees

External: Public distrust toward PGW Failure to understand specific needs of diverse

communities in Philadelphia “A Perpetual Foreigner” image

SUGGESTED STRATEGIES FOR

PGW Internal:Encourage sharing, input, and dialogue

(Give feedback and reward open dialogue) among PGW’s diverse workforce

Manager should share, comment, give feedback, and answer

Show and provide value to employeesPersonalize Blueflame and Good Gas News

to include more employee storiesEngage in one to one interviews with

employees. Further fuels a sense of community within PGW

SUGGESTED STRATEGIES FOR PGW

External:› Stronger Social Media Presence (Being

quirky, humorous, in tune with popular culture)

› Sponsor Youth and Housing Programs for NACs to expand name recognition within the community

› Promoting community events that create solidarity within the community and allow PGW’s name to be associated with caring and sympathy

QUESTIONS?