Climate activists are celebrating a significant victory in their efforts to encourage Philadelphia Gas Works (PGW) to transition from its long-standing reliance on fossil fuels.
The proposed settlement originates from a ratemaking case before the Pennsylvania Public Utility Commission and reduces PGW’s original proposed rate hikes by nearly 40%.
Additionally, the settlement includes plans for a public engagement process aimed at helping the city achieve its long-term climate goal of eliminating greenhouse gas emissions by 2050.
State Rep. Chris Rabb expressed his optimism about PGW’s future, stating, ‘I’m here to celebrate … because PGW needs to be on the right side of history.’
Rabb emphasized the importance of accountability for PGW’s leaders, saying, ‘I believe it will be, and it’s because of all of you coming together to make it happen.’
He humorously referenced PGW as ‘Philadelphia Geothermal Works’ as he joined environmental groups at a press conference in front of City Hall.
Activists have been urging PGW to embrace carbon-free technologies, including networked geothermal systems.
‘It’s in PGW’s best interest to diversify its operations and not just rely on fracked gas,’ Rabb said.
He contested the notion of ‘natural’ gas, comparing it to ‘clean coal’ and asserting that such a classification is misleading.
Despite some advances in the city’s carbon emission reductions, the path forward for PGW, a fossil fuel provider, remains uncertain.
There are questions regarding how the utility will address public feedback on climate impacts, as the settlement allows for two public hearings but does not mandate that PGW act on any received input.
Rabb noted, ‘So time will tell how PGW responds, which is why we want to celebrate.’
He highlighted the significance of this settlement as a step in the right direction for PGW, emphasizing the need for continued vigilance from the public due to the slow nature of change within the city’s old infrastructure.
In previous efforts, climate advocates expressed frustration with PGW’s engagement level on climate-related matters.
In spring, PGW had requested identifying information about members of environmental groups involved in the ratemaking case, a move that activists argued infringed on their First Amendment rights.
A judge sided with the activists, rejecting PGW’s request for the information.
The proposed settlement now awaits approval from an administrative law judge and, subsequently, the Pennsylvania Public Utility Commission.
While PGW has refrained from commenting on the ongoing proceedings, a spokesperson referenced a customer message indicating that new rates, if approved, would support the company’s financial stability and infrastructure modernization.
PGW had originally planned to raise rates significantly in fiscal year 2026, projecting an increase of approximately $12 per month for the average residential customer.
However, the settlement negotiated with various stakeholders, including advocates for affordable energy access and a coalition of environmental groups known as the Energy Justice Advocates, has reduced the impact of this rate hike by more than 40%.
Furthermore, PGW has agreed to reassess how it calculates a surcharge known as ‘weather normalization’ to reflect the realities of a warming climate.
In instances of warmer-than-average winters, which are becoming more frequent due to climate change, customers typically consume less gas for heating, leading to potential revenue losses for PGW.
To offset this, the utility had previously implemented added charges, drawing public ire during particularly warm winters when bills spiked unexpectedly.
In response to criticism, PGW has abandoned plans for an additional ‘revenue normalization’ surcharge that would have further impacted customers’ bills.
Patrick Houston from Here for Climate Justice remarked on the implications of the proposed settlement, saying, ‘This proposed settlement represents an important step towards a clean energy future for Philadelphia, and it provides critical protections for Philadelphians against increasing energy costs.’
He also praised PGW’s commitment in the agreement to allocate $9 million for home insulation and weatherization initiatives targeting low-income residents in 2026.
Houston stated, ‘We know that weatherization reduces energy consumption, and reduction in energy consumption also reduces energy costs.’
The settlement reflects an effort to enhance PGW’s programs that are vital for low-income residents, including initiatives designed to assist customers with financial responsibility.
The Pennsylvania Public Utility Commission is anticipated to make a decision on the proposed settlement in November.
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