Request for Expressions of Interest (REI) ? City of Philadelphia...

Location:	Pennsylvania
Posted:	Jan 29, 2026
Due:
Agency:	City of Philadelphia
Type of Government:	State & Local
Category:	X - Lease or Rental of Facilities
Publication URL:	To access bid details, please log in.

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REI ‐ City of Philadelphia LOCs

Questions and Answers

General Questions

1. Will the City consider CP dealer proposals as part of this response?

As noted in the REI, the City reserves the right to select the chosen provider to also serve as

dealer on the Commercial Paper. Additional Dealer proposals are not necessary.

2. Requests for Financial Statements

PGW’s FY 2025 audited financial statements are available on EMMA. All other financial

statements and other Annual Continuing Disclosure materials will be posted to EMMA by

February 25, 2026. (with the exception of PGW’s additional Annual Continuing Disclosure items,

which will be posted by April 25, 2026).

Questions Related to Philadelphia Gas Works

1. Is the FY 2026 budget available for Gas Works?

Yes. PGW’s FY 2026 Operating Budget is available at www.pgworks.com/about‐us/pgw‐

financials.

2. What is the current delinquency rate? Are you able to provide an update on collections and

delinquencies for the current fiscal year?

PGW’s rolling 24‐month collection rate for the first four months of FY 2026 were September ‐

98.40%, October ‐ 98.13%, November ‐ 97.30%, and December ‐ 96.71%.

3. Are projected rate increases, if any, to support CIP needs known at this time? Are there any

planned future rate increases?

No. There is currently no projected rate increase planned to directly support CIP. As part of

PGW’s five‐year forecast, the Company is planning on a $35.0MM general rate increase in FY

2030.

4. Are you able to share the results of the most recent PA PUC rate increase requests?

On February 27, 2025, PGW filed for an increase in its distribution base rates with the PA PUC.

The filing sought a general rate increase calculated to produce $105.0 million, or 15.73%, in

additional annual operating revenues based upon a twenty‐year normal weather assumption.

The filing also sought to recover $7.8 million in under collections related to the Distribution

System Infrastructure Charge (“DSIC”) for the year ended December 31, 2024, over the course of

two years, requested to increase the fixed monthly customer charge component as well as the

volumetric delivery charge component of base rates, and proposed a new rate recovery

mechanism, a Revenue Normalization Adjustment (RNA).

On August 11, 2025, PGW filed a Joint Petition for Settlement in which all rate case parties

either joined or did not oppose. The Settlement Agreement provided PGW with a general rate

increase of $62.0 million for service rendered on or after November 28, 2025, and the

continuation of the Weather Normalization Adjustment. These new rates were implemented on

December 1, 2025. The Settlement Agreement also provided PGW with a temporary increase in

the DSIC of an additional $7.8 million a year for two years, resulting in a total DSIC rate of 8.3%.

PGW implemented the temporary DSIC increase on December 1, 2025. This temporary increase

will terminate on November 30, 2027. The RNA was not included in the Settlement Agreement.

Settlement agreements with reduced revenue requirements are typical in PUC base rate

proceedings and are the product of compromise between the parties’ diverse interests. The PUC

has indicated that settlement results are often preferable to those achieved at the conclusion of

a fully litigated proceeding. On October 9th, 2025, the PUC entered its Order and Opinion in the

case.

5. Are you able to provide any progress updates on the ongoing cast iron pipeline upgrades?

PGW expects to abandon 31.4 miles under our existing Long Term Infrastructure Improvement

Plan (LTIIP) in FY 2026 and an additional 9 miles from PHMSA’s Natural Gas Distribution

Infrastructure Safety and Modernization Grant (NGDISM) for a total of 40 miles of abandoned

cast iron pipe in FY 2026.

6. Please provide an updated breakdown of all existing debt, and breakdown of all Bank debt

including incumbents, amounts, and expiration dates (LOCs, L/Cs, SBPAs, etc.)

As of August 31, 2025, PGW has a total of $1,120,020,000 bonds outstanding. 93% or

$1,041,210,000 are fixed rate and 7% or $78,810,000 are synthetic fixed rate bonds. The

underlying variable rate bonds (8th Series Bonds) are secured by a TD Bank LOC which expires at

the maturity date of the bonds in August 2028.

7. Can you confirm if the intent of this program is to issue tax‐exempt CP for capital project

purposes and later take out with long‐term bonds? What and when is the expected take‐

out/permanent financing for the CP Notes?

Yes. According to PGW’s five‐year forecast, the Company anticipates issuing $81.5MM capital

project notes in FY 2031. PGW will then take out the same notes with long‐term bonds in FY

2032.

8. Please provide: (a) The projected draw schedules over the next 3 years, and (b) the CAPEX

schedule for the next 3 years, including the percentage funded via debt/cash/etc.

CAPEX spending in FY 2026, FY 2027, and FY 2028 is projected to be $209.0MM, $173.0MM, and

$249.0MM, respectively. PGW anticipates using a 50/50 mix between debt and cash financing

over the next three years. The draws from PGW’s capital improvement fund are projected to be

$104.5MM, $86.5MM, and $124.5MM in FY 2026, FY 2027, and FY 2028, respectively.

9. Does PGW expect to issue CP Notes in the coming months or years?

No.

10. Please confirm the intended lien position for the Letter of Credit to support the Gas Works CP.

The Notes will continue to be subordinate lien.

11. Is there any subordinate debt outstanding (understand the CP facility is subordinate but has no

balance outstanding)?

None.

12. Provide percentage of sales that are residential vs. wholesale.

Firm gas sales in PGW’s FY 2025 were 38.3 Bcf. Residential sales were approximately 78%;

Commercial sales were approximately 18%; Industrial sales were approximately 1%; and

Municipal and Housing Authority sales were approximately 3% of total firm sales. Total firm

transportation volumes were 6.8 Bcf and total interruptible transportation volumes were 24.6

Bcf.

13. Confirm that, unlike Water, PGW does not have a Rate Stabilization Fund.

Confirmed, PGW does not have a rate stabilization fund.

14. Are there any updates on the current Pension and OPEB funding?

Please refer to Note 10, page 56, Note 11, page 63, and the supplemental schedules, beginning

on page 88, of PGW’s audited financial statements.

15. Have there been any updates or initiatives on IT security and Counter‐terrorism investment, and

steps taken to ensure any additional security measures?

PGW is taking strategic steps to continue to evolve our cybersecurity posture from a traditional

perimeter‐based model to a data‐ and identity‐centric approach. As part of this shift, PGW has

selected a Data Loss Prevention (DLP) solution and are currently conducting a proof of concept.

This investment, along with other security enhancements, will enable database activity

monitoring to provide early indicators of potential cyber threats, automated data discovery to

identify and protect information stored in unauthorized locations, and behavioral analytics to

detect insider threats. In parallel, PGW has strengthened password reset and MFA bypass

procedures to mitigate the growing risk of social engineering attacks. PGW has implemented a

secure service desk solution to enforce user identity verification, with in‐person verification

required when additional assurance is needed.

16. Can you please provide an anticipated usage for the proposed facility?

Please see the response to question 7.

Questions Related to Philadelphia Water Department

1. What is the current delinquency rate? Are you able to provide an update on collections and

delinquencies for the current fiscal year?

The Water Department’s cumulative collections of annual billings for Fiscal Years 2022, 2023,

2024 and 2025, were each respectively, 96.7%, 96.8%, 95.5% and 96.93

2. Are projected rate increases, if any, to support CIP needs known at this time?

Any future rate increase will support PWD systems which include funding of the CIP

3. Has the PA Department of Environmental Protection agreed to extending the consent order and

agreement under the force majeure clause?

We received an extension for Yr10 (https://water.phila.gov/wp‐content/uploads/files/coa‐

year10extension‐granted‐2021‐04‐13.pdf).

4. Can you confirm if the intent of this program is to issue tax‐exempt CP for capital project

purposes and later take out with long‐term bonds? What and when is the expected take‐

out/permanent financing for the CP Notes?

The expected use of the commercial paper program is to fund expenses incurred for projects

funded or planned to be funded via the Pennsylvania Infrastructure Investment Authority State

Revolving Fund (PENNVEST). Such commercial paper would be repaid incrementally upon

receipt of reimbursements from PENNVEST. In addition, the commercial paper may also fund a

portion of the Water & Wastewater System’s capital improvement program; such commercial

paper would be paid down with a subsequent revenue bond issuance.

5. Are quarterly statements for the most recent quarter available for Water and Wastewater?

Our most recent financial statements are posted on EMMA

6. Please provide: (a) The projected draw schedules over the next 3 years, and (b) the CAPEX

schedule for the next 3 years, including the percentage funded via debt/cash/etc.

a. Since the implementation of the CP program in July 2021, PWD has issued a total of

$309.5 million across the three series. However, the CP has been paid off quickly as

PENNVEST reimbursements are received; over the past three years, outstanding

balances on the total program have ranged from $21.5 million to $87.6 million on a

monthly basis. While there is not a specific projected draw schedule, the outstanding

PENNVEST loans to be funded through CP draws over the next few years is

approximately $435 million.

b. In February 2025, on behalf of the PWD, the engineering firm of Arcadis U.S Inc.

released its Consulting Engineering’s Report (Arcadis Report) for the Twenty‐Eighth

Supplemental Ordinance in connection with the adoption of the Supplemental

Ordinance.

In March 2025, on behalf of the PWD, Black & Veatch Management Consulting, LLC

released its Direct Testimony (B&V Report) before the Philadelphia Water Rate Water,

Sewer and Storm Water Rate Board in connection the 2025 General Rate Proceeding.

Each of the Arcadis Report and the B&V Report contained schedules including the PWD

Capital Program and projected debt and pay‐go funding therefore.

Estimates of the Capital Program, Capital Expenditures, Funding Sources, Allocation

between debt, grants and pay‐go funding can be drawn from these schedules.

The Arcadis Report and the B&V Report were prepared individually by each firm and do

not yield identical results.

The relevant schedules from the Arcadis Report and B&V Report are included as

attachments at the end of this document.

7. Is there any subordinate debt outstanding? Is the CP facility senior or subordinate?

PWD does not have any subordinate debt outstanding. The CP facility is senior lien

8. Provide percentage of sales that are residential vs. wholesale.

Residential – 46%, Wholesale – 8%, Non residential (commercial)46%

9. Per the 2024 Audit, $76.9MM was reported as Interest Income, however, only $8MM is

used/credit to the Revenue Fund per the rate covenant calculation. Is the other $68MM

restricted?

YES

Is any other portion of the $68MM available for debt service?

10. Are you able to provide any updates to the main replacement program status?

Based on our FY26 Capital budget our goal is 32 miles of water main replacement and 14 miles

of sewer main reconstruction/renewal. The total funding allocated for water main replacement

program is $203,000,000 and $302,500,000 for sewer main reconstruction/renewal program.

Please provide an updated breakdown of all existing debt, and breakdown of all Bank debt

including incumbents, amounts, and expiration dates (LOCs, L/Cs, SBPAs, etc.)

Please see the attached Schedule 1 for a breakdown of existing Water and Wastewater Revenue

Bonds as of June 30, 2025.

Liquidity Facility Providers for Philadelphia Water and Wastewater Revenue debt, as of

December 31, 2025:

Series

Principal Amount Current Provider Expiration Date

CP Series A $125,000,000

Barclays

June 28, 2026

CP Series B $125,000,000

RBC

June 28, 2027

CP Series C $150,000,000

TD Bank

June 28, 2027

11. Are there any updates on the progress of any environmental regulatory orders, and

remediation?

PWD received an extension for Yr10 of the consent order and agreement. As of today, PWD has

not submitted a request for extension for Yr15 (6/1/26). However, PWD is considering making

this request to the PADEP.

12. Please confirm most recent unrestricted liquidity and days cash on hand.

Based upon the PWD Annual Financial Report for FY 2024 & 2023:

Per the Statement of Fund Net Position (FY24) (Pg. 8), the Department has $159.426mm of

Equity in Treasurer’s Account among its Current Assets.

Per the Condensed Statement of Revenues, Expenses and Changes in Net Position (FY24) (Pg. 5),

the Department had $525.921mm of Operating Expenses excluding Depreciation and

Amortization.

This results in calculated days cash on hand of approximately 111 days (calculated as $159.426

million divided by $525.921 million, multiplied by 365 days).

Note that Moody’s, in its recent Credit Opinion update of November 2025, indicated:

“The Philadelphia Water Department holds good liquidity. Our official liquidity metric indicates

81 days cash on hand, based on the department's unrestricted cash. This figure does not include

This is the opportunity summary page. It provides an overview of this opportunity and a preview of the attached documentation.

Title	Description			Date	Format
Request for Expressions of Interest (REI) – City of Philadelphia Letters of Credit and Alternative Variable Rate Financings - Questions and Answers PDF	Questions and answers related to the REI - City of Philadelphia Letters of Credit and Alternative Variable Rate Financings.			January 29, 2026	PDF

Request for Expressions of Interest (REI) ? City of Philadelphia Letters of Credit and Alternative Variable Rate Financings - Questions and Answers PDF

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