On Aug. 30, 2005, Standard & Poor's affirmed its ratings on Philadelphia Gas Works' (PGW) revenue bonds. The ratings reflect the weak service territory, historically poor collections, high debt levels, and thin coverage of aggregate debt service. 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 499,000 customers in Philadelphia. As of July 2005, the utility had about $1.2 billion in total debt outstanding. A weak service territory has contributed to low collection rates that have plagued the company for several years. Undercollection of billed accounts becomes acute in years with colder-than-normal winter months and high gas...
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