Committee Hearing, February 20, 2003

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON TRANSPORTATION AND PUBLIC UTILITIES - - - Room 696, City Hall Philadelphia, Pennsylvania Thursday, February 20, 2003 1:15 p.m. - - - RESOLUTION 020748 - A Resolution authorizing City Council's Committee on Transportation and Public Utilities to convene public hearings to take public testimony from the City Administration, Philadelphia Gas Works (PGW) management, the general public and other interested parties in order to develop recommendations including legislative strategies for modifying PGW's Senior Citizen Discount Program in light of Pennsylvania's Natural Gas Choice and Competition Act, which abolishes the Senior Citizen Discount for Senior Citizen customers of PGW effective September 1, 2003. - - - PRESENT: COUNCILMAN W. WILSON GOODE, Chairman COUNCILMAN DAVID COHEN, Vice Chair COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN RICHARD MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN ANGEL ORTIZ COUNCILWOMAN BLONDELL REYNOLDS-BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN TASCO - - - V A R A L L O, INCORPORATED 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 (215) 561-2220 I N D E X RESOLUTION 020748 PAGE PEDRO RODRIGUEZ, Action Alliance ........... PHILIP BERTOCCI, Community Legal Services .. 26 BETTY FLANAGAN, AFSCME DC 47 Retirees ...... 56 PAT ALBRIGHT, Crossroads Women's Center .... 60 SAM WEINSTEIN, Save Our Services Coalition .. 65 MARTIN BERGER, Pennsylvania Alliance for Retired Americans ..................... 77 GAIL GARRETT, Phila. Corporation for Aging .. 83 LAURA MINTZER, Senior Law Center ........... 86 DELBERT FRANKLIN, SEIU Local 36 ............ 89 THOMAS KNUDSEN, President PGW .............. 92 CHRISTINA COLTRO, PGW ..................... 111 JOSEPH NARDELLA, Local 686 ................. 113 JAMES LENNOX, Local 686 .................... 116 3 2/20/03 - TRANSPORTATION - RES. 020748

Good afternoon. Thank you for coming. This is a public hearing of the Committee on Transportation and Public Utilities on Resolution 020748. A note to the quorum as present, Members of the Committee include the Vice Chair, David Cohen to my right; Councilman Richard Mariano; Councilman Angel Ortiz to my left; and I'm the Chair, Councilman Goode; and Councilwoman Tasco has joined us as well. This hearing will come to order. I'll ask the Clerk to please read the title of the Resolution.

Resolution 020748, a Resolution authorizing City Council's Committee on Transportation and Public Utilities to convene public hearings to take public testimony from the City Administration, Philadelphia Gas Works (PGW) management, the general public and other interested parties in order to develop recommendations including legislative strategies for modifying PGW's Senior Citizen Discount Program in light of Pennsylvania's Natural Gas Choice and Competition Act which abolishes the Senior Citizen Discount for Senior Citizen customers of PGW effective 4 2/20/03 - TRANSPORTATION - RES. 020748 September 1, 2003.

At this time, if any Members of the Committee have opening remarks. The Chair recognizes Councilman Ortiz.

Thank you, Mr. Chairman, for permitting me to share a few thoughts about this important issue we're about to discuss today. When Councilman Cohen and I introduced this Resolution, we did it because there are thousands of senior citizens in our City who every day have to make a decision about what to cut; their food for the day, their medicine for the month, the utilities bills or their meager savings for some unforeseen catastrophe in the future. Every decision has consequences. And some of those decisions could be life threatening or damaging to their health. In fact, since the beginning of this winter cycle, the Philadelphia Health Department last week reported a total of six senior citizen deaths and this winter has yet to peak. These deaths have all been related to unheated homes of seniors who, with a limited income, have to struggle 5 2/20/03 - TRANSPORTATION - RES. 020748 with the dilemma of robbing Peter to pay Paul. In most cases, seniors will modify their gas heating service. That's creating a dangerously fine line between warmth and death, than the risk of paying a higher gas bill and not being able to pay. It is, therefore, no wonder why these are the same people that are least likely to be in arrears and most likely the ones to find a way to pay their bills. Even according to PGW data analyses of Senior Citizen Discount heat customers, 97 percent of these customers usually pay on time at a rate of 83 percent. And those in arrears owe an average of less than $20 a month. But any senior will tell you that to do this, they have to cut corners. As a society and as a City, we have made decisions in the past to intervene in making the lives of those who can least fend for themselves a little better and a little bit more comfortable. Twenty years ago this City Council believed that it could help our retirees by providing a modest cut in their monthly gas bill. We did that because we own the Philadelphia Gas Works and because seniors themselves pointed out to us a direct way in which we could help stretch their monthly incomes. The 20 6 2/20/03 - TRANSPORTATION - RES. 020748 percent Senior Citizen Discount is the expression of the best that we have as a society in this City. It is a high mark of public policy, a compassionate and dignified way to appreciate and assist them. A historical reason why the percent 7 discount is offered to anyone over the age of 65 in 8 Philadelphia regardless of income is because we 9 value and appreciate those citizens who have decided 10 to remain in Philadelphia and support our economy. 11 Let me say the following to those who 12 might now propose to means test the 20 percent 13 discount program. Frankly, means testing would 14 appear, at least on the surface, to be fair and good 15 public policy. But many believe that such 16 pre-qualifiers have adverse or counter-productive 17 effects. Programs that have means testing as part 18 of their qualifications have very low participation 19 rates. 20 For example, George Bush and his republican administration are offering now to change certain welfare regulations because of means tests. In fact, they're offering that those people who go and have their lunch in schools or have their breakfast, those kids, that their families will have 7 2/20/03 - TRANSPORTATION - RES. 020748 to fill a myriad of forms to prove their poverty level before those kids can qualify for the lunch school programs. You know that that is not going to work. You know that that is a republican trick in order to save money and not feed poor people. And that we will not do here in Philadelphia. For example, the Medicaid savings program in Pennsylvania, a wonderful federal program that can save up to $700 per year to low-income senior citizens have most of those eligible not participating in it. In fact, 220 senior citizens across Pennsylvania are not participating. C.

Proponents of means testing for seniors have not defined any specifics about eligibility requirements, but most senior citizens view it as a code language for a welfare-like program designed to create another layer of bureaucracy that is intrusive and humiliating. I don't believe we should make them feel less than dignified by contaminating this 20 percent senior discount with some ill-conceived means test. More importantly, I believe seniors in 8 2/20/03 - TRANSPORTATION - RES. 020748 our society are a special class of people. Outside those few that might benefit from a base of assets, stock dividends or inherent wealth, 63 percent of seniors in the City are women who, in their work lifetime, have earned less and received less retirement income than their male counterparts. 58 percent of our seniors receive $25,000 or less. So let's be clear, our senior citizen population is not the beneficiary of the Dow Jones or represent the upper crust of our local society. They're not the mainline individuals here. We're not representing the high, rich, wealthy owners of stock and Corporate America. The Senior Citizen Discount was never intended to be or should be a free handout. It is something that seniors have earned. It is our way of giving back a little to our elders, those who built our bridges and schools, policed our streets, and, yes, risked their lives at war to safeguard this democracy. 50 per month. So we are here today to begin figuring out what we can do to address the PUC's decision to wipe out this program as of September 2003. I 9 2/20/03 - TRANSPORTATION - RES. 020748 believe there's always a way to remedy that policy and that decision. This is the one place to start. Thank you, Mr. Chairman. )

Thank you, Councilman. Let the record reflect that Councilman Frank DiCicco, a Member of the Committee, is also present, along with Councilman Frank Rizzo. At this point, Councilman Cohen would like to make opening remarks.

I think Councilman Ortiz ought to be congratulated for that very fine analysis that he's made. I would go one step further. I think the effort to cut the Senior Citizen Discount is an attempt by people to get the PGW ready for sale to private interests so that private interests can make profits out of the citizens of Philadelphia, including the senior citizens. As Councilman Ortiz said, the senior citizens have earned the right to this discount, and Philadelphia must not go back on its word. Philadelphia said that senior citizens who worked 10 2/20/03 - TRANSPORTATION - RES. 020748 hard deserve this discount as a reward for the great service they've done for the City of Philadelphia. This is step one in the effort by private interests to turn PGW from a company -- it's actually not really a company. It's a fiction of our imagination. PGW is just a made-up name, formula, combining a few pieces of property with City policies. And they call it PGW. And nobody challenged it because private industry hopes to buy it and then really rock us for the kind of huge profits that private utilities make from offering energy to the people of Philadelphia and other parts of the country. We must not let that happen. And I believe there's a strong majority, maybe even unanimity in the City Council to see that that doesn't happen. We're behind you in whatever you to do to protect your rights. You've earned it. Don't let anybody steal it away from you. (Applause.)

I don't want to play games with the City of Philadelphia or with the PGW management. But when they were in trouble, they came to the City Council and we helped them. We helped them because we thought they were performing 11 2/20/03 - TRANSPORTATION - RES. 020748 useful service. Now, suddenly, they begin to announce that PGW is on good financial grounds. Why? Because of the help that the senior citizens and others of Philadelphia who gave to PGW when it was in trouble. And now they want to turn around, take it away from us and sell it to private interests. We're not going to let that happen. You're not going to. And I hope that you're going to find the overwhelming majority of City Council is going to be on your side. If not, I think the walls of City Hall will be shaking before we permit them to steal this away from the people of Philadelphia, particularly the senior citizens. Thank you. (Applause.)

Can I say something before we begin? Councilman Rizzo is here and Councilman DiCicco. I want to make special mention that the 20 percent discount really is an idea and a program really that was begun by the late Mayor Frank Rizzo. And I think it was -- I disagreed with Frank Rizzo's father for many, many years and over many, many 12 2/20/03 - TRANSPORTATION - RES. 020748 issues, but this is one issue that I agreed with him on. (Applause.)

The Chair recognizes Councilman Rizzo.

Councilman Ortiz, thank you for that. Thank God I found one thing that you agreed with former Mayor Frank L. Rizzo. But I can tell you, ladies and gentlemen, I think my father realized the importance of this percent discount. And I can tell you 13 that, as long as I sit in this Council, I will do 14 everything humanly possible to make sure that this 15 is not taken away from you and not taken away from 16 my father. Thank you. 17 (Applause.) 18

The Chair recognizes 19 Councilman Mariano for opening remarks. 20

Thank you, Mr. Chairman. I just want to make it real quick. I just want to refer to Councilman Cohen and Councilman Ortiz and the rest of the Members on this Council, but those two especially, because they've been fighting this for a long time. 13 2/20/03 - TRANSPORTATION - RES. 020748 I think maybe Councilman Cohen can give us a little legal aspect of this because him and Councilman Ortiz are attorneys. I think that Councilman Cohen -- I'll ask him to say something that he already has. Since this is in a Public Utility Commission and it's no longer in our hands, we could probably join with senior citizen's groups as part of lawsuits. And maybe Councilman Cohen can help me with that.

If there's any way of doing it, we're going to be doing it.

That's all I ask. If we could do that legally.

What we want to do is to make clear that City Council stands solidly behind the decision it made almost 30 years ago in December of 1973, when it was a City Council Ordinance that created the percent discount. 20 We're not going to let people take it away. It was a good idea then when Mayor Rizzo did it. Councilman, I have to tell you that I also, not only Councilman Ortiz, had many differences with your father on policy, but the one place we didn't was the labor matters, because your 14 2/20/03 - TRANSPORTATION - RES. 020748 father was solid and he was solid on the needs of senior citizens. And we're not going to let anybody take that away either from his legacy or from the legacy of the present City Council.

Thank you, Councilman. Just let me finish up. Being that you are the senior member of this Committee, we are referring to you on all that information, I'm referring to you. So thank you for your legal advice. He's older than you think.

Point of information.

The Chair recognizes Councilman Rizzo again.

Thank you, Councilman. I have just some recent contact with the Public Utility Commission, and I think it's important that we're all aware that the commissioners are up to be replaced. As a matter of fact, I believe that our new Governor has the ability to appoint new members of the Public Utility Commission, and I believe there's been some legislation passed where there has to be a balance. I think the majority party can't have more than 15 2/20/03 - TRANSPORTATION - RES. 020748 three and the minority party, I think the remaining two. I believe there's five members. I think it's important right now that we're aware that, as we speak, those commissioners are up for replacement.

Thank you, Councilman Rizzo. The Chair recognizes Councilman DiCicco for opening remarks.

Thank you, Mr. Chairman. I apologize for getting here late. From a selfish standpoint, I'm certainly going to be supporting the continuation of 14 percent discount. 15 (Applause.) 16

I'm about six years 17 away from qualifying myself for the discount. But 18 more importantly for me is, over the last 12 months 19 or so a number of issues came up that this City 20 Council had to deal with. Just about a year ago we had a major battle on our hands when the Administration was deciding to discontinue the continuance of incremental increases in the City wage tax. Council fought that and the majority of the people of City 16 2/20/03 - TRANSPORTATION - RES. 020748 Council voted to continue with that incremental reduction of the City wage tax. More recently, and you all, I'm sure, are aware of what we've been going through with the real estate tax increases that occurred in late 2002. And many of you I see shaking your head, you either have paid them already or are in the process of paying them. We may also be in the process of an appeal. I mean, it just seems to be that it's one thing after the other. What is interesting about the real estate state tax increase, which I consider to be very offensive and counter-productive, is that the majority of the people in the district that I represent, a large portion of the people in the district that I represent are very affluent people, people who most people would suspect could afford it. But they're taxpayers like everyone else and they need to be supported as well. But when you look at the overall real estate tax increase in the City of Philadelphia, the recent one, proportionately, the people who get hit the hardest, the people who are getting hit the hardest, are the people who are on fixed incomes and at the lower end of the economic ladder. 17 2/20/03 - TRANSPORTATION - RES. 020748 So it's one shot last year with wage taxes. Second shot last year -- at end of last year, around October or November, on real estate tax increases. And now to talk about the percent 6 discount, removing that. We can't stand for this 7 any longer. You can't balance the budget on the 8 backs of the people of this City any longer. We've 9 got to figure out a better way in which we manage 10 government and do the right thing by the people who 11 have made the commitment to stay here. And a lot of 12 the people in this room probably at one time or 13 another could have moved. But you made a commitment 14 to stay here. You're the backbone of the society in 15 this City and we need to support you fully. I'm 16 here today for that reason. Thank you. 17 (Applause.) 18

The Chair recognizes 19 Councilman Cohen for brief remarks. 20

For a brief comment. The brief comment is that when the legislation took place that turned over jurisdiction of PGW to the state, many of us in City Council publicly said we thought this was Step in the effort to get rid of the Senior Citizen Discount. We believed that the 18 2/20/03 - TRANSPORTATION - RES. 020748 State and the City were working together. We didn't have proof of it before, but now we have proof of it. Both the State and the City are working with private industry instead of working with senior citizens. We want to put an end to that. What they're trying to do is to make PGW a company that is saleable to private interests. I guess those people in office like the idea that maybe they'll be a new source of campaign contributions. And we don't want that. We want the money to stay in Philadelphia. We want to make life better for senior citizens, not keep pressing them to the wall. And I just wanted you to know that, in my opinion, clearly the whole purpose of transferring jurisdiction over PGW to the State was because the State has had long a policy saying that public utilities cannot give these kind of discounts. And that's the reason the jurisdiction of PGW was turned over to the State. We've got to guarantee that that does not happen in this situation. (Applause.)

Thank you, Councilman 19 2/20/03 - TRANSPORTATION - RES. 020748 Cohen. This concludes our opening statements by Members of the Committee. The first panel to be called will include Pedro Rodriguez, Director of Action Alliance, and Mr. Phil Bertocci, Esquire, Community Legal Services. Will you please approach the witness table and state your name for the record? (Applause.)

Good afternoon.

Good afternoon.

Good afternoon, Mr. Chairman, Members of the Committee. My name is Pedro Rodriguez. I'm the Executive Director of the Action Alliance of Senior Citizens of Greater Philadelphia. Before I start my remarks, I'd like to recognize the presence of our esteemed president, Ms. Mamie E. Wiggins. (Applause.)

Mr. Chairman, this morning, members of the Action Alliance and other senior citizens from across Philadelphia picketed the headquarters of GlaxoSmithKline to complain about that drug giant's ever-escalating prices for 20 2/20/03 - TRANSPORTATION - RES. 020748 medication. The reason I bring this up is because many of our seniors in Philadelphia have to resort to ordering their prescriptions through the mail and the Internet so they can afford it. As a matter of fact, every week in our office we see senior citizens who come to us for help, asking us how to suggest ways in which they can stretch their fixed incomes every month. One of the things that we have had over the years to offer those individuals was the fact that when it came to gas, they pretty much knew that they could stretch a little bit there because they had the discount to count on. The Action Alliance of Senior Citizens is a membership organization. We have about 12,000 dues paying members in the region. We represent about 220 senior citizen clubs that affiliate more than 110,000 senior citizens. This is our 30th year. And we feel very proud about some of the achievements that we have done in our City, not only to benefit senior citizens and to make retirement in Philadelphia a dignified event, but we also contributed a great deal to the fabric of this City. Our members, some of them were born in 21 2/20/03 - TRANSPORTATION - RES. 020748 this City. They grew up here. But most of them, they work here. They constituted the fabric of the neighborhoods. They are the people who built the unions, integrated the workplace, the schools, public places. They fought against the war in Vietnam in many ways by demonstrating for peace. They have contributed a great deal to the educational process of our children. They have left and continue to do so a tremendous legacy for current Philadelphians and future Philadelphians. We're here today because we are greatly disturbed of developments both in Harrisburg and in Philadelphia of an implementation of the Natural Gas Regulation Act. Action Alliance and many others were involved in that discussion a couple years ago when the state took over jurisdiction of PGW, when they disenfranchised the citizens of Philadelphia. And we sounded the alarm back then, that this was a sneak attack to target seniors, and the discount in particular. This program is in danger of elimination, and such an action will put in jeopardy the well-being of many of our members and very many other Philadelphians. We applaud City Council's adoption of 22 2/20/03 - TRANSPORTATION - RES. 020748 this Resolution, particularly your efforts, Mr. Chairman. I am calling for this public hearing to find out exactly what's going on with the Street Administration and the Philadelphia Gas Works and to determine the impact the discount has on the lives of thousands of our elderly. We're also here to sound the alarm about the potentially devastating impact some of the proposed changes might have had on Philadelphians who can least afford to pay more for their utilities. Action Alliance is particularly concerned about proposed changes that will bar anyone turning 65, after September 1st, 2003, from applying to the program. The other suggestion aims at severely limiting who can apply for the discount after that date. The current percent Senior Citizen 19 Discount would be in jeopardy for 73,000 senior 20 citizens in the City. The legislation that changes the natural gas sale and distribution system in Philadelphia left the door open for the Public Utility Commission to alter the benefit to seniors in the future. But that same law noted that only the Philadelphia City Council has the power to do 23 2/20/03 - TRANSPORTATION - RES. 020748 so. Let me repeat that. Not the Street Administration, not PGW, but your elected officials here in City Council, you have the final say on what happens to this program now and in the future. (Applause.)

The percent discount 8 was one of Action Alliance's sweetest victories. 9 Back in 1973 -- we're vague on the date exactly when 10 it happened, but back then we insisted that this 11 benefit be universal as an incentive that the City 12 offers its senior citizens to stay in the City. 13 Sometimes we give millions of dollars to 14 private developers and corporations who come into 15 town. They stay in for one or two years, maybe they 16 create 10 jobs and then they pack up and leave. So 17 why not provide this incentive and use the same 18 logic to thousands of seniors who have stayed in 19 Philadelphia, who contribute to the fabric of this 20 society and to at least offer that little incentive so they can stretch their limited incomes. Mr. Chairman, I say to you today that proposals to eliminate or alter this program constitute bad public policy. Such plans are particularly detrimental to the health and safety of 24 2/20/03 - TRANSPORTATION - RES. 020748 senior citizens. In effect, PGW's plan to eliminate a discount is more like a percent tax increase on 4 senior citizens. 5 We understand that PGW is using this 6 opportunity to improve its financing. But let me 7 remind you that senior citizens do not create the 8 mismanagement of PGW; thus, they should not be 9 called to balance the utility's books on their 10 backs. 11 Mr. Chairman, if the 20 percent discount 12 were to be eliminated, it will have a detrimental 13 and adverse economic impact on the City of 14 Philadelphia. Senior citizens spend more than they 15 have an income. According to census data, they 16 spend 104 percent of their income, as opposed to 17 non-senior citizens who only spend about 87 percent 18 of their income. Alleviation of the 20 percent 19 discount on the number of people who have it now and 20 the potential number of people who will eligible for it after September 1st, 2003, if you carry that, forcing them to pay the additional 20 percent to PGW, we estimate it will have a detrimental impact, a negative impact on Philadelphia's economy of $31 million, just using the a cumulative effects of the 25 2/20/03 - TRANSPORTATION - RES. 020748 purchasing power and the multiplied effect. But most importantly, moving beyond the numbers, City Council and the citizens of Philadelphia, when you instituted the discount, you made a social compact between generations. You say you're 65. You have an account PGW. You live in the City. We're going to reward you with this modest discount. And people like you and I have been subsidizing that end of the bargain at the rate of $2.50, three dollars a month. I posed this question the other day to a bunch of young people, and I say, would you be willing to pay three dollars a month to have the piece of mind that seniors will not freeze to death in the winter? And the answer was a resounding yes. Philadelphia is made up of good people, people with heart and compassion, people who look and see the broader policy that's at stake here. We cannot isolate PGW from the society that Philadelphia is. If we cut the discount here, we're going to pay as a society someplace else. We're going to have to pay with increased public health care costs, housing deterioration in the neighborhoods that we're trying to revive now and, 2/20/03 - TRANSPORTATION - RES. 020748 yes, the ultimate price, the freezing to death of senior citizens. We would like to remind City Council again that only you has final say on this issue. Either you can continue the legacy that you started back when you instituted this program. Either you can leave an example by telling PUC and anybody else in Harrisburg who would like to hear, that you want to govern yourself as a City, and you place all the confidence of the future of the City on the people who live, work and retire in the City. Thank you very much, Mr. Chairman. (Applause.)

Thank you for your testimony, Mr. Rodriguez. I will now take testimony from Mr. Bertocci. Good afternoon. Have copies of your testimony been circulated?

Yes, they have.

Please proceed.

Good afternoon, Chairman Goode, City Council Members. It's wonderful to see so many seniors out here today under the conditions. 27 2/20/03 - TRANSPORTATION - RES. 020748 I'm going to skip over the first page of my testimony. You know generally who I am. My name is Phillip Bertocci. I am an attorney with Community Legal Services. I serve as the public advocate for matters before the Gas Commission involving PGW. I also represent low-income groups before the PUC in PGW matters. And CLS every year represents hundreds of utility customers coming to us for assistance with problems they had with PGW, PECO, the Water Department and other utilities. Today I'm testifying not as the public advocate, but on behalf of CLS and our client constituency, representing people from no income at all up to around 200 percent of the federal poverty level. We understand on a day-to-day basis the difficulties that low-income Philadelphians have in paying their energy bills, essentially meaning the most basic necessities of life. We welcome Council's vote on Resolution 020748 and the convening of these hearings. The issue, as we know, is the PGW Senior Citizen Discount, a 20 percent discount on the gas bill provided by PGW now to approximately 79, 80,000 seniors citizens in 28 2/20/03 - TRANSPORTATION - RES. 020748 Philadelphia. In this testimony, I'm going to talk about two subjects. The first is the legal framework in which Council is called to act in addressing the Senior Citizen Discount. And the second concerns the stakes at issue for PGW's low-income senior citizens. My analysis clearly shows that PGW's low-income program will not, I repeat, will not be an adequate substitute or replacement for the low-income seniors who will be barred from getting the Senior Citizen Discount starting next September. For most of this population, for most of this low-income population, there will be no discounts at all. Let's start with the legal framework. We all know by now that the Natural Gas Choice and Competition Act transferred jurisdiction over PGW rates and its tariff from the Gas Commission to the PUC, the Public Utility Commission. The effects are well known. We see it in daily lives. We know that the PUC is dealing with the rate cases that PGW has been filing. We also know that, as a customer, if we have a problem with PGW, it's to the PUC, no 25 longer to the Gas Commission, that a customer files 29 2/20/03 - TRANSPORTATION - RES. 020748 an appeal in order to protest against a wrongful termination, to dispute a bill, whatever it might be. Less well known, however, is what the Act contains about the Senior Citizen Discount. I have to say at the beginning -- and the reason it's less well known is that Section 2212-R of the Act, that's the part dealing with the Senior Citizen Discount, that hasn't hit yet. That's only going to begin to hit in September 2003. There's a copy of Section 2212-R associated with that document called "Frequently Asked Questions," which I think is in the Councilmen's packets, so you can kind of look at what the actual language of the statute is. But let's begin with the Act itself. I'm going to preface my remarks by saying, you have to understand, many people think that this law is not very clear concerning the Senior Citizen Discount. And there is not a single court that's ruled on its meaning. The best I can do is give you my legal opinion. We all know that ultimately the court decides what the law is. But a lot of times, the actions taken by bodies like this determine the framework in which a court makes its decision. And 30 2/20/03 - TRANSPORTATION - RES. 020748 you have a great influence on the way in which a court will rule. First, what does the Gas Choice Act require for the Senior Citizen Discount and what does it provide? First, it provides the seniors who are receiving the Senior Citizen Discount as of September 1st shall be entitled to receive that discount going forward.

Second, continuation of the program for any other seniors -- that's anyone not receiving the discount as of September 1st -- will not happen unless the City modifies its Senior Citizen Discount Program and modifies it by Ordinance and then obtains PUC approval for that modified program. That's assuming that the law is not just stricken down for some other reason. There's a pending court case but, frankly, right now, we're looking at September 1st, 2003. We're seeing some people that are not going to be able to get that benefit that senior citizens for 30 years have been enjoying. If the City Council and the City Administration do nothing now, then starting September 1st, the Senior Citizen Discount Program will be closed. Since none of us 31 2/20/03 - TRANSPORTATION - RES. 020748 live forever, that would mean over the next or 30 years, the number of PGW senior citizens customers receiving the discount will diminish to none. The City Administration and PGW management have informed the PUC that it accepts this course of action or non-action. " This report was submitted by PGW to the PUC in support of proposed tariff amendments affecting the closing of the Senior Citizen Discount to new participants starting in the fall. Third, the Gas Choice Act contains language which I believe offers the City a fighting chance to save the situation. The Gas Choice Act says that the City, by Ordinance again, can modify the Senior Citizen Discount Program. And it says that the PUC, quote, may approve a program designed to provide discounted rates to senior citizens provided that such rates and the terms of such programs are just and reasonable, close quotes. I interpret that language to mean that just as the City, by Ordinance, established a Senior 32 2/20/03 - TRANSPORTATION - RES. 020748 Citizen Discount in the first place, it can now modify the program. Whatever modification City Council might make, however, must be submitted to the PUC for approval. And, of course, the modification has to be done by Ordinance. And then the PUC has to approve it. Fourth. This is the last one. What is the standard that the PUC will use in deciding whether to approve a modified program? The statute says that PUC may approve a modified program which is just and reasonable. Now, the term "just and reasonable" sounds like an ordinary term to most of us, but it has a specialized regulatory meaning. It's still a very broad term, even for the court. It's sort of like, they'll consider what's best under the totality of the circumstances, whatever they may be. Nevertheless, it's a very broad standard, and I think that that's good. That offers some basis for hope for the City. It's basically a balancing standard in which the PUC would balance the interest of customers as a whole against the utility's need to generate sufficient revenues to maintain its financial health. It's a balancing standard. Now, 33 2/20/03 - TRANSPORTATION - RES. 020748 in judging whether a proposed modified Senior Citizen Discount program is just and reasonable, the PUC will probably consider a whole range of factors in this balancing. I've outlined some of those in, again, the "Frequently Asked Questions" part of your packet. I think that these factors, all these nine factors -- courts love these nine factors -- but ultimately they all kind of coalesce in one response, a yes or a no. 11 And I think that, first, the City has to make a forceful request, a well-documented request, a request contained in the statute which says more or less this: Look, we have senior citizens who have made significant contributions to our community. They are living in urban conditions with modest to low incomes with significant health vulnerabilities, some very isolated despite our best efforts. We want to use a small fraction of the resources of our own municipally-owned utility to continue to protect them, safe and warm in their homes.

This is a voice that so far the PUC has not heard. This is the message that we would like to see them take in the form of an Ordinance passed by City Council and signed by the Mayor. That 34 2/20/03 - TRANSPORTATION - RES. 020748 ordinance would propose a modified Senior Citizen Discount program so that the program can be continued for senior citizens reaching 65 after September 1st, 2003. Let's get away from the legal framework. What about the second part of what I want to talk about? What are the stakes at issue here for PGW's low-income senior citizens? The consultant's report, which PGW submitted in support of its recommendation concerning the discount, gives the impression that if the Senior Citizen Discount remains closed to new participants, truly needy senior citizens will not be left out in the cold. Rather, it suggested, they will be able to obtain similar discounts from PGW's low-income program. That program is called the Customer Responsibility Program. It's known as CRP. Unfortunately, analysis shows that this impression is just plain wrong. I have provided to Councilmembers in their packet a detailed written comments on PGW's consultant's report. To briefly summarize them here, the problem is that CRP is structured. It provides significant discounts to households living 35 2/20/03 - TRANSPORTATION - RES. 020748 below the federal poverty level and with relatively high usage. Using PGW's estimates, there may be as many as 24,000 senior citizens at or below 150 percent of the federal poverty level. These seniors are generally regarded as undeniably low-income customers. But most of these people are between 150 and 100 percent of poverty, not below 100 percent, where significant discounts are available under CRP. Moreover, the usage levels of most senior citizens' households, the usage levels are relatively low, and that weighs also against them qualifying for discounts under CRP. I'm going to give you a little more background concerning, CRP just so you have a little bit of context. CRP program is a type of program called a percentage-of-income program. The program that we anticipate that will be in effect in September is a modified version of CRP, in which customers who are between 100 and 150 percent of poverty pay 10 percent of their income, 10 percent of their monthly income, as their gas bill. Customers between 50 percent and a 100 percent of would pay 9 percent of their income as a gas bill, and customers between percent and 50 36 1 2/20/03 - TRANSPORTATION - RES. 020748 percent would pay 8 percent of their income as a gas bill. Now, not every customers who is below 150 percent of poverty is going to benefit from this type of program because it depends a lot upon their usage, as well as their family composition. So I think that CRP will not help most seniors. In the comments, we described what we found when how looked at how low-income seniors with household incomes between 150 and 100 percent of poverty, how they would fare in this new situation. These are indisputably low-income customers. Senior citizens customers in this category are receiving now a percent discount. We suspect that the vast 16 majority of seniors are in this category, and we 17 then ask what discounts these customers would 18 receive. 19 At current rate levels, if the modified 20 CRP program takes effect in the fall, the answers were appalling. Numerous indisputably low-income households, households with income below 150 percent of poverty, would receive no discounts at all. For instance, a two-person senior citizen household with quite ordinary usage would receive no discount 37 2/20/03 - TRANSPORTATION - RES. 020748 unless they had household income down around 100 percent of the federal poverty line, not 150 percent, which is the income level at which CRP is generally open to customers. But there would be no 6 discounts for this two-person household down to 100 percent of poverty.

One person households would receive virtually no discount unless they had incomes below 135 percent of poverty. In order to qualify for 11 percent discounts, as opposed to smaller discounts 12 under CRP, these senior households would have to 13 have even lower incomes. 14 For two-person households with ordinary 15 usage, a 20 percent discount would not be available 16 unless the household income was down in the 74 17 percent to 93 percent of poverty range. That's 18 below the poverty level. That's substantially below 19 the so-called federal poverty line or poverty level. 20 For one-person households, the 20 percent discount would not be available until the income was in the 99 to 113 percent federal poverty range.

Excuse me, Mr. Bertocci. 38 2/20/03 - TRANSPORTATION - RES. 020748

I'm at my end. Under the guise, really, of folding the Senior Citizens Discount Program into CRP, what's really happening is that many of those people that are folding into the CRP are not getting any discounts whatsoever. If this is allowed to take place, a vital safety net which has protected our seniors for many years is going to disappear. (Applause.)

We'll take Committee questions for Mr. Rodriguez and Mr. Bertocci.

Thank you, Mr. Chairman. Mr. Bertocci, thank you. All of those numbers are very confusing, to say the least. And to try to make some sense of it what we're trying to bring out here is that, if this is eliminated, out of a universe of how many seniors that we have currently at a universe projected, how many will be left out in the cold, if the 20 percent discount is eliminated? Could you give us numbers on that, other than the CRP? I mean, it gets very confusing. What we're trying to establish is that the PUC policy and the legislative policy of 39 2/20/03 - TRANSPORTATION - RES. 020748 deregulation of eliminating the percent discount is an appalling public policy that attacks senior citizens' well-being. Could you make it in clear, very clear numbers who's going to be impacted and who's not going to be impacted? What's the universe of the people that come in under this?

Basically I'm saying that 9 senior citizens down to 100 percent of poverty -- 10

Sir, we don't 11 understand that, 100 percent of poverty. People are 12 poor. Poor is poor. Poor is poor. 13

I know. Just a minute. 14 I have the exact numbers here. I have them in my 15 testimony. 16

My mother used to 17 work in a factory. My mother used to go to a 18 factory and come home with a very small check. And 19 she had to divide that check into the rent, the 20 utilities, everything else. When you speak on these numbers like that, it doesn't make a lot of sense to a lot of people out there that don't understand this bureaucratic and federal language. So give us approximate numbers.

One-person family right 40 2/20/03 - TRANSPORTATION - RES. 020748 now, $738 gross income per month. Two-person family right now, $995 per month. That is 100 percent of poverty. Anyone having more income than that, in general terms, will not be benefited by CRP.

The modified program that replaces the percent? 8

That's right. They will 9 not be benefited by that. That means that they will 10 get nothing. 11

You've got to make 12 less than a thousand dollars a month? 13

A two-person household, 14 yes. 15

Mr. Bertocci, is 16 there a stereotypical people, a common person 17 affected by this? What would be the standard case 18 of a person affected by this? 19

When you say, is there 20 a --

Who is the average person affected by this?

Well, a senior citizen, 65. Any person that would apply for the Senior Citizen Discount after September 1st, 2003. Those 41 2/20/03 - TRANSPORTATION - RES. 020748 are people that in the past would have applied, but the program is not going to exist for them.

What I'm asking for is a profile of a common person affected by the state legislation and how many of these common people will be affected?

Numbers.

The company estimates that there are 24,000 senior citizens below 150 percent of the poverty. And they're claiming that there are --

So you cannot in simplistic laymen's terms give a profile of the average person impacted by this? I'm not asking you to give us an anecdotal description. I'm asking somewhere between a very technical description in terms of poverty statistics and an anecdotal description. What is the average person impacted by this and how many of those people exist in Philadelphia?

24,000 exists, but we don't know. One of the points that I want to make is that most of the information that has been presented is not based on -- 42 2/20/03 - TRANSPORTATION - RES. 020748

So there is not a common profile?

The company has provided no profile to us.

According to you, there is no common profile of a person affected by this?

Well, we don't know, for instance, how many seniors right now --

I can tell you what it would be a year or two from now.

Excuse me, Councilman.

Yes?

You have to be recognized. Let him respond to the question. Are you finished with your response?

Yes.

The Chair recognizes Councilman Cohen.

What I was saying is, one doesn't have to be a genius to understand this is only Step 1. This is not to be permanent policy, because the permanent policy is to eliminate 43 2/20/03 - TRANSPORTATION - RES. 020748 entirely even for people who have been on Senior Citizen Discount for the last years. They're not 4 going to be the thieves who want to steal this away 5 from us. They're not going to be satisfied with 6 this first theft. They're going to keep on stealing 7 from us until they eliminate entirely the Senior 8 Citizens Discount. 9 Let's not play games and make believe 10 that these figures, as complicated as they are, 11 exist for the purpose of arriving at a fair 12 decision. They're aimed at hiding the purpose. 13 They're saying, "Oh, in the beginning we're only 14 going to freeze maybe 5,000 people to death the 15 first year." 16 Before they're over with their plans, 17 they're going to freeze a lot of our senior 18 citizens, many, many thousands of them. 19 Senior citizens have worked hard. They 20 have a sense of pride. You know what they're going to do to manage to pay their bills? Do you know what they're going to do? They're going to turn down the thermostat. Councilman Rizzo came over to me before and said, "David, do you know what's going to happen?" And he's absolutely right on it. 44 2/20/03 - TRANSPORTATION - RES. 020748 Senior citizens will begin turning down the thermostat, trying to live with 60 degrees of heat when they need 70 degrees. Or 58. We're going to hear more and more stories of senior citizens being found dead at home. Because the people that are proposing this have no 8 interest in the life of senior citizens. They see us as just being in the way. So please don't waste your time on the little details of this plan. The purpose is to eliminate entirely the Senior Citizen Discount. And everybody better be aware of that right now. (Applause.)

There is no such thing as a just change in the system except to expand it. And what they're doing is the reverse. Just like they're stealing the pensions away from the workers in the private industry plan. You're reading it every day. General Motors now says it can't pay pensions.

Councilman Cohen, can we allow some more time for more testimony?

Well, I think what I've given is testimony because I believe it to be 45 2/20/03 - TRANSPORTATION - RES. 020748 fact. Thank you. (Applause.)

The Chair recognizes Councilman Rizzo.

Thank you, Mr. Chairman. Councilman Cohen just mentioned one of my many concerns, is the fact that I can imagine how our senior citizens -- and I'll repeat it for the record because I want it to come from my lips -- is that the people that are not going to be eligible for this program, if it goes away -- and I doubt that it's going to go away, to tell you the truth -- that's how they're going to react. When you get older, you just can't deal with the cold like you could. And I can bet, knowing my senior citizen constituents, that to save a few bucks, even though it's not healthy for them, that thermostat that once was set at 68 is going to be down to 62. And the first time the bill comes in, then it gets back to 60. So I would hope that the people that need to hear, need to listen, are considerate of something that is very important to a very important population, as far as I'm concerned, 46 2/20/03 - TRANSPORTATION - RES. 020748 the senior citizens that have been to hell and back for us. Thank you. (Applause.)

Mr. Rodriguez, in your own terms, could you tell us who is impacted by this on September 1st?

Yes, Mr. Chairman. I'd like to give you a profile of who might be impacted if the discount goes away. I'd just like to ask those of you here, if you think you'll be affected by elimination of the discount, please stand up right now. (Applause.)

That's a profile of who's going to be impacted if we eliminate the discount.

The Chairman recognizes Councilman Ortiz.

Mr. Chairman, thank you. Mr. Rodriguez, I got this data from PGW, so I want to just throw out some numbers. According to PGW information, as of February 13th, there are 477,910 residential 47 2/20/03 - TRANSPORTATION - RES. 020748 customers. There are 416,135 residential heating customers. There are 73,659 heating customers receiving senior discounts. Now, that is the senior discount that will be eliminated by the legislation, true or not? I see shaking in the back there.

Point of order.

The Chair recognizes Councilwoman Tasco.

The population gross?

Right. I'm just giving a flat universe.

The people that are receiving the discount will continue to receive it. It's only people that would apply after September 1st, 2003.

Only under the current plan. There's nothing to stop that plan from being changed next week.

I just want that for the record. There are 5,896 non-heating customers receiving senior discount. There are 48,987 CRP participants at or below 135 percent of the federal poverty level. 48 2/20/03 - TRANSPORTATION - RES. 020748 In numbers, in dollar numbers, could you tell me what 135 percent of the federal poverty level is?

It's 135 percent for a family of one is $996. For a family of 2 --

Hold it. Hold it. There are 48 -- Okay. Go ahead.

For a family of two, it's $1,343 right now. For a family of three, $1,690.

So we have 48,000 individuals, 48,987, at that level right now participating in the CRP program?

Yes. Some are participating. There may be other people with that level of income that aren't participating because it's not a good deal for them. It depends on how much gas they use.

We don't have any way of getting the numbers of those individuals who do not participate in that program? Do we have a way of getting those numbers?

You could do it demographically. But PGW knows what people have. When people apply to PGW, they will present their 49 2/20/03 - TRANSPORTATION - RES. 020748 income if they are asking to participate in CRP. Until they apply to CRP, to my knowledge, PGW generally doesn't know what their income level is.

Another number I have here is, there are 9,968 CRP participants with income between 136 and 150 percent of the federal poverty level. What's that number?

150 percent of the federal poverty level for one person is $1,107. For two persons is $1,492, and for three persons, $1,878. And that's all dollars.

That's monthly?

That's monthly. Between 135 to 150 of poverty, that's not really so relevant for what we're looking at. Because after September 1st, 2003, it's likely that the CRP program will be open up to 150 percent of poverty. So it will be these 3 tiers; the 10 percent, the 9 percent, the 8 percent that determines what a customer pays.

Thank you.

The Chair recognizes Councilman Cohen.

It's awful hard not to get upset, and I apologize publicly to the Chair 50 2/20/03 - TRANSPORTATION - RES. 020748 and everybody else. But you can't deal calmly with thieves. That's what I think we're dealing with. (Applause.)

Mr. Bertocci, you read to us a proposed plan presented by PGW to the Public Utility Commission; is that right? This is a plan that PGW and the City of Philadelphia is proposing?

Yes, they have proposed it.

Is there anything to stop them from changing that plan tomorrow?

They've submitted it as part of a restructuring plan. And there's been an administrative law judge's decision at this point, but the PUC has not ultimately ruled on it.

How long do we have to wait before PGW can change the plan to something even worse? Let's give everybody the facts.

I can't predict, but it seems to me what the law seems to say is, for the senior citizens who already have the Senior Citizens Discount, that those people can't lose the Senior Citizen Discount unless there is a vote of City 51 2/20/03 - TRANSPORTATION - RES. 020748 Council, that only City Council can change that, that the PUC does not have the authority to change that.

The state has a history of changing laws o'clock at night with no 7 notice to anybody. 8 (Applause.) 9

If you want to deal 10 honestly with senior citizens, and I think this City Council wants to, we have to let you know what the real facts are, not what PGW says they are. But the real facts. And the real facts are that, as of this moment, the Senior Citizen Discount for everybody is endangered. And after that comes the termination plans for the CRP. Because what you have is government advocating its responsibility to care for the safety and welfare of its citizens. Therefore, there is no safety in thinking, oh, this is the worst of it. If we only lose by freezing maybe a few thousand citizens each year, that won't been too bad. I mean, that seems to be the philosophy. The loss of a single life is an absolute disgrace because the government is supposed to defend us, protect us, give us a secure 52 2/20/03 - TRANSPORTATION - RES. 020748 senior citizen life, not take it away from us. (Applause.)

I don't want to hear these technical so-called details that may offer a dose of support to people saying, well, maybe I'll be able to live to the end of the year instead of dying in October. I'm personally at the point where I can't afford to lose a single day, nor can any senior citizen, nor should any citizen in Philadelphia ever be put to it. What kind of a City do we have? We have a democratic City. I'm a very partisan democrat, yet I have to make notice that the democratic Mayor says this plan is needed, while the republican candidate for Mayor is saying he wants to maintain the present system. That's not what ought to be. We ought to have both candidates for Mayor saying the senior citizens are number one. (Applause.)

Thank you, Mr. Chairman.

Thank you, Councilman Cohen. Let the record show that Council 53 2/20/03 - TRANSPORTATION - RES. 020748 President Ann Verna has joined us, along with Councilwoman Donna Reed Miller and Councilwoman Blondell Reynolds Brown. We'll take one more comment from Mr. Rodriguez, then we're going to move on to another panel because this panel will come back.

Certainly. Mr. Chairman, Councilman Cohen makes a really important point that I think the people here and you should be reminded of it. Steadily, the citizens of Philadelphia has been losing their rights to self-govern and bordering on the criminal intervention with the state legislature in the affairs of this City. The midnight raid that two jurisdictions from the Gas Commission to the PUC of PGW was opposed strongly by some of the community organizations in this town. I think that, as elected officials, you have a double responsibility to really stand up firm against such intermissions and your ability to self govern. Saying that, I would like to recommend to you, Mr. Chairman, that City Council conducts more of these public hearings in the neighborhoods so the residents of those neighborhoods have an 54 2/20/03 - TRANSPORTATION - RES. 020748 opportunity to express to you and for the record the impact of the proposed elimination of the percent 4 discount after September 1st will have on their 5 lives, because of the concern that people who might 6 be what are called, quote, unquote, grandfathered 7 into the program might also have. Because once it 8 gets taken away from a group of people, it certainly 9 looks like it's going to be taken away from you, as 10 well. 11 Bringing these public hearings to South 12 Philadelphia, to Northeast Philadelphia, to 13 Southwest Philadelphia, and to the Northwestern 14 parts of the City will give the Committee and City 15 Council a real clear picture of the universe of the 16 typical individual who gets the discount and those 17 who are in line after September 1st to sign up to 18 it. 19 So I recommend that we have those public 20 hearings throughout the City as an opportunity to educate not only the Members of Council and the Committee, but also those elected officials from Philadelphia who travel to Harrisburg and seem to have forgotten where they came from. (Applause.) 55 2/20/03 - TRANSPORTATION - RES. 020748

Thank you, Mr. Rodriguez. We will bring this panel back for further questioning. The next panel consists of one witness. I don't see the Controller here. Is anyone representing the Controller's Office? We'll move to our third panel; Betty Flanagan, DC 47 Retirees; Sam Weinstein, Save Our Services Coalition; and Pat Albright, Crossroads Women's Center. Please approach the witness table.

Chairman, if I may, one comment?

The Chair recognizes Councilman Ortiz.

After discussion with the Chairman and the President of City Council, I just want you to know that this is the first hearing we will have, but the next hearing we will have, we'll be out in the community so that the senior citizens will not have to make all the travel all the way here to City Hall. I am so delighted to see 56 2/20/03 - TRANSPORTATION - RES. 020748 you here today, even though the biggest snowstorm of the 21st Century hit us. Your presence here testifies as to your interest in this issue. And you know you're going to be there. (Applause.)

We have discussed it and I'll be very glad to entertain a formal request from Councilman Ortiz in writing. The first person to testify, please state your name for the record.

Betty Flanagan. Good afternoon, Chairman Goode, Vice Chairman Cohen. Councilman Ortiz, we thank you for Resolution No. 020748. Good afternoon to all of the other Members of Council. My name is Elizabeth Betty Flanagan, President of AFSCME District Council 47 Retiree Chapter. The spelling of my last name is F-L-A-N-A-G-A-N. I represent 763 former City workers who are now retired. One of the best kept secrets in Philadelphia is the Philadelphia Gas Works 20 57 2/20/03 - TRANSPORTATION - RES. 020748 percent discount on gas bills for seniors aged 65 and over. This percent deduction is called the 4 Senior Citizen Discount Program. This program has 5 been in effect since December 14, 1973, when 6 Philadelphia City Council by Ordinance declared a 20 7 percent discount for residents age 65 and over. 8 This benefit for future enrollees will be 9 discontinued by the Philadelphia Gas Works August 10 31st, 2003. 11 The criteria for the current enrollees' 12 Senior Citizen Discount Program does not have any 13 embarrassing forms to be filled out. There's no 14 questions about your private life or your income to 15 qualify for the SCD program. 16 In order to receive this 20 percent 17 discount, seniors are required to give proof of age, 18 their Social Security number and present their last 19 paid gas bill. This procedure lends dignity to 20 people who have been paying their gas bills for 30 years and longer. According to the US Census Bureau, Philadelphia has 212,457 citizens aged 65 and over. The Philadelphia Gas Works boasts about given 82,000 seniors this 20 percent discount on 58 2/20/03 - TRANSPORTATION - RES. 020748 their gas bill. At the same time, PGW intends to discontinue the program for new enrollees. 8,000 elderly citizens per year over the next decade would be denied the Senior Citizen Discount program. Seniors labor to give the present generation the opportunities and the comfort that is enjoyed today. Seniors have helped build our society and continue to support, guide and influence this generation for the better. But too many of our seniors are facing a dilemma of making choices about food, medicine and bills. Two weeks ago I ran into an old friend who I had not seen in a year because she had moved to Virginia. We were near a Boston Market restaurant. I suggested we go into the restaurant to have lunch. Our conversation was true to form - old folks discussing pain, aches and pills. She she told me her cost for medications is so high that she had to buy a pill cutter for some of her medicines so they would last longer. She also stated she was buying cold cuts as a substitute for poultry and meet. This is a proud 86-year-old senior who is not poverty stricken, but it is obvious her fixed income has not kept up with 59 2/20/03 - TRANSPORTATION - RES. 020748 today's expenses. Seniors are confronted with these choices daily. Most seniors depend on fixed incomes that have no flexibility for growth. So many seniors do not have the opportunity to increase their income as their expenses skyrocket. Look at the Philadelphia Gas Works which has increased consumer rates by 40 percent since year 2000. This year, for some seniors, the cost for health insurance medical benefits has increased percent, and the cost for prescription drug 13 coverage has increased 20 percent. They are faced 14 with high cost of drugs that are no longer covered 15 by their Prescription Drug Plan. Increases in housing rents, in real estate taxes have become extreme. Other utilities, including electric and water, are following suit. How can one in good conscience deny these seniors from receiving a Senior Citizen Discount? (Applause.)

I make an urgent plea for this Committee on Transportation and Public Utilities to present to City Council a proposed 60 2/20/03 - TRANSPORTATION - RES. 020748 program to reinstate the Senior Citizen Discount Program, a program that Philadelphia seniors have been using for 30 years. Seniors need your help now. (Applause.)

They need the support of City Council and the Mayor of Philadelphia in convincing the Pennsylvania Public Utility Commission to acknowledge and correct their decision, which placed seniors in jeopardy of losing even more of the financial resources needed for adequate daily living. May this plan become an Ordinance by City Council and approved by the Pennsylvania Public Utility Commission so our seniors will continue to receive a much-needed discount on their gas bills. (Applause.)

Thank you for your testimony, Ms. Flanagan. We should have brought you up first. (Applause.)

Pat Albright.

Good afternoon. I'm here today to represent the Crossroads Women's Center, 61 2/20/03 - TRANSPORTATION - RES. 020748 which is located in Germantown. I also speak on behalf of the Every Mother is a Working Mother Network, one of the groups operating out of the center, which is working to get the value of caring work included in our right to welfare and other benefits and resources. I'm here because nationally, 70 percent of poor seniors are women. In Philadelphia, they tend to be women of color. That answers the question I think that was asked earlier about who the typical person is who will be affected by this. In a TANF petition that was issued from our center, we point out that black equity, which begins with girls, drags women's income down even after retirement. Women in the US with pensions receive half the amount that men receive, $4,200 annually compared to $7,800 for men. A retirement gap where women receive 53 cents for every dollar a man receives. Many of those who utilize our center are already struggling to make ends meet. They will be put in even more desperate financial straits by PGW's proposed ending of the 20 percent Senior Citizen Discount. Grandmothers, grandfathers too, 62 2/20/03 - TRANSPORTATION - RES. 020748 many of whom are seniors, are increasingly counted on to care for grandchildren and others in need of care. They're already stretched to the limit financially and otherwise, and must not be asked to bear an additional burden to help bail out PGW. Women seniors who work at or make use of our center depend on the discount. Those of us who will be new seniors in the future will need it just as much or more, given the way that gas prices have risen. We paid our dues over many years and want what we are owed when we turn 65. We want to register with the City Council a complete and total opposition to the dismantling of the Senior Citizen Discount Program, to its being altered in any way, except modified to increase the discount, which has remained the same since its inception 30 years ago to reflect the increase in heating cost. In addition, the program could be improved by making the discount automatic upon the customer turning 65. Or in the case of a couple, upon either partner turning 65, regardless of whose name the bill is in, thus eliminating the need to make a special application at all. 63 2/20/03 - TRANSPORTATION - RES. 020748 Means testing the program is totally unacceptable. Means testing would result in many who are eligible and need help not getting it. Crossroads Women's Center and the Every Mother is a Working Mother Network are both members of the Save our Services Coalition that was formed to oppose PGW's cutbacks in services, including the closures and cutbacks of PGW neighborhood customer service offices. The elimination of two of six neighborhood offices and the cuts in hours of the remaining have already created hardship for many, including seniors, who relied on these offices for paying their bills or to apply for the Senior Discount, LIHEAP grants or other financial assistance in paying their bills. Women again are particularly impacted, as we are often the ones paying those bills. Many of us single mothers or grandmothers, including welfare mothers already stressed by the demands of Welfare Reform who end up having to travel greater distances to reach an office, often with children in tow, are paying more at check cashing offices. Impacted as well are people with disabilities, 64 2/20/03 - TRANSPORTATION - RES. 020748 people without checking accounts or phones or in need of bilingual services. This proposal to eliminate also comes on the heels of yet another additional expense now born by the gas consumer, the need to purchase Parts and Labor contracts or pay out-of-pocket for service of our heaters.

Many, including myself, have discovered this winter when we try to get service under the contracts we've already paid for and end up paying out-of-pocket anyway for someone else to fix the problem to avoid yet another freezing night for ourselves and our children while waiting for the understaffed PGW service department to send someone out. No one should have to choose between heating and eating. PGW's proposal to end the discount would cause more deaths and would add insult to injury to those who, after a lifetime of hard work, have found themselves unable to make ends meet due to inadequate or nonexistent pensions. Shame on PGW. If PGW wants to balance its budget, it must do it another way. Those of us who work the 65 2/20/03 - TRANSPORTATION - RES. 020748 hardest and have the least refuse to bear the burden. City Council, we ask for your support in seeing that the discount is continued and, in fact, increased and improved. Thank you. )

Thank you, Ms. Albright. Mr. Weinstein.

Good afternoon. I'm here representing the Save Our Services Coalition that Pat referred to, SOS as we refer to it, and also the Gas Workers Union Local 686 which coordinates that coalition. The coalition includes the Action Alliance of Senior Citizens of Greater Philadelphia, AFSCME District Council 33, AFSCME District Council 47, Citizens for Consumer Justice, Crossroads Women's Center, Every Mother is a Working Mother Network, Pennsylvania Alliance for Retired Americans, Philadelphia ACORN, Philadelphia Central Labor Council AFL-CIO, Philadelphia Coalition of Labor Union Women, Philadelphia Jewish Labor Committee, Philadelphia Jobs with Justice, the 66 2/20/03 - TRANSPORTATION - RES. 020748 Philadelphia NAACP, Philadelphia Wages for Housework Campaign, SEIU Locals 686, 36, 473, 1201, and 668, Temple University Hospital Workers Association, and the Utility Workers Union of America. Endorsing individuals include some of you present, including City Controller, Jonathan Saidel, Congressman Joe Hoeffel, Councilman David Cohen, Councilwoman Joan Krajewski, Councilman Richard Mariano and Councilman Angel Ortiz. The SOS Coalition was formed last September, and by early November had collected some 11,000 signatures. These are those 11,000 signatures that we collected. They opposed the privatization of PGW, the closure of district customer services offices and degradation or removal of PGW services, which as far as we are concerned, includes the PGW percent Senior Citizen Discount. 19 Some services are deteriorating daily. 20 We note that the number of employees who go out and do repairs, the number in the Field Service Department has been allowed to decline fairly steeply, resulting in the fact that in this very cold winter it has taken quite some time for people to get their heaters serviced, even if they are 67 2/20/03 - TRANSPORTATION - RES. 020748 paying for a service plan. And, of course, a lot of those people who need the service were senior citizens. We have given a copy of these petition signatures to the PUC hearing judge. We intend to provide every Member of City Council with their own set. We are pleased to note that the Mayor's Office has backed off, at least for the time being, the drive to privatize this vital asset of the people of Philadelphia. But apparently, the kind of democracy represented by these petitions has not been enough to persuade the Judge, the PUC Judge, to stand up to PGW's request to do away with the discount. She issued a recommended decision this past Tuesday. And on the Senior Citizen Discount, which she refers to as SCD, Senior Citizen Discount, her comment is worth noting. "I recommend that the Commission allow PGW to implement its SCD proposal, not because I agree with it or because I think it comports with Commission policy. PGW has pointed out that it is unlike all the other gas utilities regulated by the Commission, and one of the key differences is its 68 2/20/03 - TRANSPORTATION - RES. 020748 creation as a municipal utility through Philadelphia's City Charter, and its relationship to Philadelphia City Council. " I want to repeat that last sentence. " Now, as I was reading this -- it's not in my prepared remarks -- but I would note that what she is saying there, in essence, is she thinks that PGW has your backing to do away with the Senior Citizen Discount, and that's why she's letting it happen. She's, in fact, blaming you. She goes on. "The SCD program was initiated by action of City Council, which has legislative oversight of PGW. The legislature which included PGW in the Act and in the Commission's jurisdiction, did not go so far as to abolish the SCD by act of law. PGW has received and responded to management audit and has received a secretarial letter from the Commission instructing it to prepare alternatives to submit to City Council. PGW did commission and receive an expert report which included recommendations on the 69 2/20/03 - TRANSPORTATION - RES.

020748 SCD, and PGW chose not to implement its recommendation. It has not submitted any alternatives to City Council. " Gee, thanks. "The Commission has presented PGW with several recommendations, which it has not accepted. I recommend that the Commission allow PGW to follow its interpretation of Section 2212-R of the Act relating to senior citizens. PGW has not asked the Commission to approve its SCD, although SEIU" -- and by that she means the gas workers -- "PGW asked the Commission to approve its announced intention and method to gradually abolish this rate. " Now, that's what she said. But the Commission itself has not yet acted. You can act and get something changed before that happens. Because they still believe that you're in favor of doing away with it. Of course, I am no lawyer, but it seems to me that far too much power is being put 70 2/20/03 - TRANSPORTATION - RES. 020748 in the hands of PGW and taken away from City Council. A small piece of the City, PGW is making public policy for the City of Philadelphia about how resources are allocated and whether seniors citizens, the majority of them women of color, living on low incomes should get rate relief. I thought the reason that we were fighting to keep PGW in the hands of the people of Philadelphia as a public entity was so that there would be public control over these kinds of decisions. I thought those decisions were your job. )

Frankly, the way this decision is written, it seems to me that you, City Council, could order PGW to change its request to PUC, make it clear that you stand with seniors in Philly, and perhaps prevent this travesty from happening in the first place. (Applause.)

I want to make one other point briefly, if I may. That is, there has been some questions raised about the discount because it is not means tested. I would point out that the PUC judge did not find the discount unjust or 71 2/20/03 - TRANSPORTATION - RES. 020748 unreasonable, the legal terminology used by the PUC. But further than that, of 159,000 senior households in the City, only about half avail themselves of the discount. Where people live and the conditions under which they live become our working conditions when Local 686's members go out to people's houses to work on their appliances. Our members know that seniors are not rich and that they need this discount. And so we would oppose any means testing which might reduce even further the number of seniors who actually make use of the discount. PGW has told us that 50 percent of the people in Pennsylvania entitled to Low Income Energy Assistance Program live in Philadelphia, but only 28 percent of the state's LIHEAP money goes to the Philadelphians. We don't want to make life even harder for seniors by adding them to the pile, so to speak. Finally, we ask you to act swiftly. Restore this program, and restore some dignity to those who have spent their lives in Philadelphia through the good times and the bad times and deserve our support. 72 2/20/03 - TRANSPORTATION - RES. 020748 It seems strange that a society that is willing to spend billions dropping bombs cannot find the money for a couple of bucks out of every bill to help keep seniors, present and future, warm. (Applause.)

Thank you for your testimony, Mr. Weinstein. Let me say for the record that when a vote is taken on this Resolution or any Bill that is crafted, you will find that the majority of this Council will be in favor of the Senior Citizen Discount. I can say that without fear of contradiction. Let me also say that I say that also in the context that we do understand that we no longer have legislative oversight, though. The reason that this Resolution is in this Committee is because this is the Committee that actually interfaced with the Public Utility Commission. It's because the Public Utility Commission has taken over the powers here, otherwise this Committee would be in the Committee on Public Property and Public Works and, in essence, if we still have control, rather than having control taken away us by the PUC and by the state 73 2/20/03 - TRANSPORTATION - RES. 020748 legislators, we wouldn't even be having a hearing. But at this time I will take questions from the Committee to the Panel. The Chair recognizes Councilman Ortiz.

In Germantown, how many senior citizens daily go through your center?

Well, we're not a large center. But we do have -- I can't say that a huge number is coming through -- but we have enough women who come by, talk about what problems they're having, that we know that that's like the tip of the iceberg. And we know that there are many, many others in the community who are in need of this help and who would suffer terribly if it were eliminated.

Germantown is really home-ownership and longstanding families that have lived there for generations, so you have quite a big population of senior citizens. I think your statement is very good, Mr. Weinstein and Ms. Flanagan. I think you make very clear what the issues are. Obviously, it is up to this Council to be able to take the information that you're giving to us -- and I think the Chairman, Wilson Goode made it very clear. When this issue is 74 2/20/03 - TRANSPORTATION - RES. 020748 put before the entire City Council, there will be a majority of City Council. I have no fear of saying that. There will be a majority of City Council to forward to the PUC the sentiments of this legislative body as to the percent discount. You 7 can rest assured of that. 8 (Applause.) 9

If I may respond briefly 10 to both your comments. 11 I understand that the PUC is making its 12 ruling and it will make its ruling. I think what is 13 important here is to understand that they may very 14 well take their lead from what you all do. While 15 you may not have control, you may, in essence, have 16 control by telling them what you think. 17

The Chair recognizes 18 Councilman Cohen. 19

Sometimes when the 20 government doesn't do what the citizens expect them to do, we may have to think of other than just legislative action. I'm just concerned, maybe not quite as dramatically as Mr. Weinstein was when he talked about the choice between having the money for bombing and not for senior citizens, but just think 75 2/20/03 - TRANSPORTATION - RES. 020748 locally here of the money that we've given to the sports teams. (Applause.)

My God, if we can take care of Jeff Laurie and the rest of the Eagles and the Phillies and the out-of-state fans that come into Philadelphia to watch the games, certainly we can take care of the health needs of our senior citizens. And it's as simple as that. Government has to be oriented in the right direction. It's up to the citizens to participate to the extent that we guarantee that government will do what it's supposed to do. And we're determined to do that here in Philadelphia. Thank you. (Applause.)

The Chair recognizes Councilwoman Reynolds Brown.

Thank you, Mr. Chairman. I am not a member of the Committee on Transportation and Public Utilities, but I am a member of this legislative body. I need to underscore the sentiments of both the Chairman of this Committee and the sponsor of this Resolution, 76 2/20/03 - TRANSPORTATION - RES. 020748 Councilman Angel Ortiz, and assure you, again, to quote the Chairman, without contradiction there will more than an adequate number of Members of this Body. We only need nine, but I'm confident that we'll certainly get more than that, if not a unanimous approval of this Resolution. And as you say, send a clear message to the Public Utility Commission that this is wrong. Thank you very much, Mr. Chairman. (Applause.)

Are there any questions from Members of the Committee for this panel? (No response.)

Thank you. The next panel is Martin Berger, the President of Pennsylvania Alliance for Retired Americans, Gail Garrett, Philadelphia Corporation for Aging and Laura Mintzer, Senior Law Center. Please approach the witness table. Mr. Berger.

Good afternoon.

Please state your name for the record. Please use the microphone. 77 2/20/03 - TRANSPORTATION - RES. 020748

My name is Martin Berger. I'm the President of the Pennsylvania Alliance for Retired Americans, which is the umbrella group for most of the groups that have been speaking here today. We have a statewide organization with the majority of our membership being right here in Philadelphia. I'm not going to yell at you because I think I want to keep you on my side. Besides, we've been yelling all morning. We just came back from Glaxo and we had a beautiful demonstration. You know, you say you can't move an object. Well, we moved an object this morning, and that's why I'm so confident that we're going to win this battle. We've been in front of Glaxo about 10 times. The last 10 times they locked us out. They would not let us get into the door. Today we met with two executives of Glaxo who escorted us up to their elite rooms and discussed their problems with us and set up a date for another meeting. So if you fight and work hard and are sincere about your cause, you're going to win. I'll try to keep my statements brief. (Applause.)

The main theme of my 78 2/20/03 - TRANSPORTATION - RES. 020748 statement is, at what time do we stop beating up on the seniors. I mean here is a litany of things that have been done to the seniors who are, as you know, low income. I spent my lifetime working with garment workers, low-income workers. They're not steel workers. They're not auto workers. They're garment workers. There are no jobs left in this City. They're depleted. They're gone. Our pension is very small. Most of our union members who are retired are getting social security and a smaller pension from the union. The question is, how do they live in this society? How do they make ends meet? And how does this duration of their life turn out to be disaster or comfortable as it should be for the effort they put involved? All these organizations and all these states have these tremendous budget deficits are trying to find ways to get out of the deficit. The question is, why is it that they can't find other avenues to help alleviate the budget other than picking on the seniors. I think that's what's happening today. There is nothing happening that's helping seniors. Everything that's happening is hurting the seniors. You have a certain amount of 79 2/20/03 - TRANSPORTATION - RES. 020748 money, a fixed income. People are chipping away at that income. I don't understand why we have a $1.2 trillion tax cut for the rich, for the rich, and we can't find money for a prescription plan through Medicare. That's a little problem I'm having right now. (Applause.)

And these are some of the problems we're are having with heating. I read in the Wall Street Journal that heating prices may go as high as 52 percent. LIHEAP is a good program, but LIHEAP is very limited. It doesn't say, "Hey, you can have all the oil you want for as long as you want, if you're eligible." No, it doesn't. It's very, very limited, and doesn't do the job. And right now this organization that I represent is involved in a massive effort to try and see what we can do about the steel workers, the IBW workers at Lucent, who, all of a sudden, along comes a company and says, "Thank you for the 30, 40 years you gave to the company. And, by the way, I did tell you when you retired we're going to cover you for your healthcare, prescriptions and healthcare. Oh, and by the way, we're stopping that program." 80 2/20/03 - TRANSPORTATION - RES. 020748 How does it happen that a worker who works his entire life in a steel mill, in a coal mine, in an automobile factory, in a garment factory who is waiting to retire and then they're told they have go into the market and buy healthcare not provided by the company anymore. That would take up almost all your pension check or all of your social security check to buy healthcare in the open market. You can't get it. So this is another thing. So Medicaid, Medicaid was an avenue for low income seniors. No more. Now the government is trying to say cost sharing on Medicaid, cutting the benefits. This fellow who is in the White House, whose name I can't remember right off hand, is trying to cut Medicaid benefits to the state, saying, "I can't give you all the things you want." And property taxes, I'm certainly agreed that there is no senior that I know of who came to me and said, "Marty, you won't believe it, but my property taxes went down." Hasn't happened yet. They are going up higher and higher. And more and more when we put Medicare in 1965, when we put that program in, a great, great victory for seniors over people who fought us the 81 2/20/03 - TRANSPORTATION - RES. 020748 blood in the streets, our doctors who were complaining about their livelihoods being threatened. I should have my livelihood threatened like they're having their having their livelihood threatened. But those doctors are the ones who fought us in the streets. They called us communists. They called us socialists. They called us every name under the sun. But if it wasn't for Medicare, the extension of life that we are enjoying, never would have happened. Never. (Applause.)

And we won that battle. And now that fellow in the White House, whose name, again, I can't remember, is trying to take that Medicare benefit away from us. Why must we have to win a battle and fight the rest of our lives? We're spending all our time defending our programs. As far as prescription drugs are concerned, that meeting we had with Glaxo this morning was nice. It was very convenient. We had a good time. We shook hands and all that. Meanwhile, why do American seniors have to go to Canada to get the drugs they need? If your drug is so damn lifesaving, we told them, what the hell good is it 82 2/20/03 - TRANSPORTATION - RES. 020748 if you can't afford it? (Applause.)

I don't want to take up too much time, because you've had enough talk today. Two points have come. One is the question of grandfathering. In my speeches I say I'm already a grandfather. I don't need that. But this generation that you're looking at right here does not believe in an idea of grandfathering. Because grandfathering in English means, "I got mine; I don't care if you get yours." We're not that generation. We may be the last generation who thinks that way, but this generation -- you see us up in the streets fighting for social security, privatization against it. We got our checks. We know our checks won't be hurt, but we're concerned about the most important thing: Our children and our grandchildren. That's what we're fighting for, our children and grandchildren. So grandfathering is not in there. And means testing. Well, you've heard the arguments against means testing. Thousands of our people will drop by the wayside because they won't fill out the forms and they won't come and say 83 2/20/03 - TRANSPORTATION - RES. 020748 they need it, welfare or something like that. But means testing, once you establish a number, any legislative body, City Council, United States Senate, can change those numbers over and over again. We're opposed to means testing and that's the statement of the Alliance for Retired Americans. Thank you. (Applause.)

Thank you for your testimony. Ms. Garrett.

Good afternoon, Mr. Chairman, City Council Members and all the members of the audience. My name is Gail Garrett. I'm the Legislative Affairs Manager for the Philadelphia Corporation for Aging, also known as PCA. Philadelphia Corporation for Aging wishes to thank City Council for the opportunity to comment on the elimination of new applicants from the Senior Citizen Discount program for senior citizen customers of the Philadelphia Gas Works as outlined in Pennsylvania's Natural Gas Choice and Competition Act. Designated as an area agency on aging 84 2/20/03 - TRANSPORTATION - RES. 020748 for Philadelphia, PCA plans, funds and administers services for over 70,000 older persons and people with disabilities each year. Serving the needs of low-income and minority elderly, PCA knows full well, the economic can challenges many Philadelphia seniors face on a daily basis. Philadelphia has the highest concentration of elders among the largest cities 10 in America and about 30 percent of older 11 Philadelphians live within 150 percent of the 12 official poverty limit, which equals to 13 approximately $1,085 a month on the high end. This 14 grim reality of poverty forces the choice of whether 15 to heat or eat for many older people. The choices 16 become more critical when the elderly face 17 monumental energy costs. And if you add to the mix 18 the healthcare and prescription drug costs already 19 drain many older Philadelphians' budgets, you have 20 created a situation that many seniors cannot afford. For nearly three decades, Philadelphia senior citizens that are PGW customers have been receiving the Senior Citizen Discount, a 20 percent discount on all charges. Throughout those years, the Senior Citizen Discount program has provided 85 2/20/03 - TRANSPORTATION - RES. 020748 fundamental protection to Philadelphia seniors, many of whom live on fixed incomes. By abolishing this allowance, many seniors will not be able to afford the natural gas service essential to maintaining the quality of their daily lives. In addition, as the Baby Boom generation ages, the need for affordable service to more Philadelphia seniors will continue to increase over the coming years. Current federal and private fuel funds cannot fill the void that the elimination of PGW's discount program will create. Also, the Low Income Home Energy Assistance Program, also known as LIHEAP, their grants are very limited. Many seniors are ineligible to receive these grants, as their incomes are above LIHEAP's income standard of 135 percent poverty, which is on the high end, approximately a thousand dollars a month. Philadelphia Corporation for Aging urges City Council to take all necessary steps to assist the Pennsylvania Public Utility Commission in developing recommendations on how to best maintain the protections afforded to senior citizen PGW customers through the modification of the Senior 86 2/20/03 - TRANSPORTATION - RES. 020748 Citizen Discount program. Thank you for conducting the hearings and allowing PCA the opportunity to advocate on behalf of Philadelphia's low-income, frail seniors who face daily struggles to remain in the community with dignity and respect. (Applause.)

Thank you for your testimony, Ms. Garrett. Ms. Mintzer.

My name is Laura Mintzer, and I'm here representing the Senior Law Center. We were formerly known as the Senior Citizen Judicare Project. Some of you may know us as Judicare. We recently moved and we've changed our name to more accurately reflect what we do. We provide free legal services to seniors 60 or over in Philadelphia to the tune of approximately 9,000 seniors per year. That includes legal education, legal representation, and community education. Our concern is three-fold with regard to these hearings, and we want to thank you for holding them. It sounds like between City Council's response and the audience's response, the whole room 87 2/20/03 - TRANSPORTATION - RES. 020748 is among friends. We're concerned about the possibility of closing some of the neighborhood PGW offices. One of the reasons that we're concerned about that is our clients tend to not have checking accounts. The greatest majority don't have checking accounts. The greatest majority get their checks either direct deposited or at their homes. They cash them and they go from office to office and pay by cash. And the main reason for that is, they want a receipt in hand. So we're concerned -- I mean, you know, we saw the result of this weather situation in the numbers of people that could come to our offices. So if the seniors have to travel even further to pay the bills the way they want to -- they don't use ATM. Most of our clients don't use ATM machines. It's the school of zealously paying their bills and zealously holding on to receipts to prove that they've paid their bills. So we're very concerned about those neighborhood offices. Of course, we're concerned about what we've been discussing here today in terms of the Senior Citizen Discount. We've all said over and over again that the seniors that we deal with simply 88 2/20/03 - TRANSPORTATION - RES. 020748 can't afford to pay anything more for anything. Every client I have is in the red every single month. I don't have a client that comes out ahead at the end of any month. Our income average is between $550 and $700 per month total. And other people that come to us who we can't serve because they're needy enough, we tell them what those averages are and their response is, nobody can live on that. And my response is, that's right. They can't live on that. But they have to somehow. We all know how serious and dangerous this would be if any of our clients had to spend one more dollar per month because they simply don't have it. I was told that there was a three minute maximum. Let me just tell you the most haunting image that I have with all the years that I've 18 been at Senior Law Center. 19 A client of mine told me that she had no 20 heat. And I asked her if she had -- we all know how 21 expensive those little electric heaters are and we 22 all know dangerous the kerosene heaters are. She 23 had a little electric heater, but only in one room. She didn't have a plug in her bedroom. So she put bricks on top of her little heater and put those 89 2/20/03 - TRANSPORTATION - RES. 020748 warm bricks in her bed at night to keep her warm. That is the most haunting story. Of all the years I've been there, that's the most haunting story I've heard. I wish all of you the best at attempting to keep PGW from doing away with this discount. It would be tragic. And thank you for your time. (Applause.)

Thank you for your testimony. Are there any questions from the Committee for this panel? We will go to the next panel. Delbert Franklin, Hattie Carter, Earlene Kendrick. Mr. Franklin, please state your name for the record and proceed with your testimony.

My name is Delbert Franklin. First I'd like to say good afternoon, Honorable Councilpeople, and thank you for giving me the testimony to today. Again, my name is Delbert Franklin and I am testifying on behalf of the Service Employees International Union, Local 36. We appreciate the chance to let you know our thoughts about the Senior Citizen Discount for PGW. 90 2/20/03 - TRANSPORTATION - RES. 020748 SEIU Local 36 represents about 4,500 building service workers in the Philadelphia area, including the janitors that clean City Hall and some who work in the Municipal Building. The majority of our members are African-American and Latinos and over half are women. Currently there are also about 1,500 retirees being paid pensions by our benefit fund and 600 of those folks are still active, due-paying members of our union. You can see some of them sitting here with us today, as you can see Local 36. As a union that represents low and middle-income workers, we strongly support maintaining the Senior Citizen Discount for PGW. We know that people have literally died from not getting their proper heat in the City. And the people who died are more likely to be poor or low-income retirees. In a recent survey or our active members on political issues, the high cost of energy was rated as one of our members' highest concerns. I have been a member of SEIU Local 36 for 15 years. Working for American Building Maintenance Company, or ABM, I am not that far from retirement myself. 91 2/20/03 - TRANSPORTATION - RES. 020748 So as I have a personal interest in maintaining the seniors' discount as well as a union one. I see and our union sees that our society puts senior citizens on that back burner. If you allow the PUC to get rid of these Senior Citizen Discount for PGW you will be turning your backs on seniors who paid their dues, who laid the groundwork for us by their working. At this last weekend's blizzard, I saw my neighbors work together to shovel snow for folks in our community who are senior citizens. Our community knows that seniors work to give us everything that we have today and that we have to work to give them back. If you allow the PUC to get rid of the seniors' discount for PGW you will be turning your back on the people who raised you, the people who brought you up. I say, and our union SEIU Local 36 say, don't shame your elders by disrespecting them this way. And on a personal note with that, I'd like to just point out real briefly that, you know, down through the corridors of time, our senior citizens have helped this country become as strong and as powerful and as rich as it is today. They 92 2/20/03 - TRANSPORTATION - RES. 020748 shouldn't have to be treated this way. We should always want to give them support in terms of what their struggles are. These are our parents, our mothers, our grandparents. I'm asking you on behalf of SEIU that whatever decisions that you decide to make that we will be standing up in support of whatever decisions you make in terms of helping our senior citizens. Thank you for allowing me to speak. (Applause.)

Thank you, Mr. Franklin. Is Mr. Carter or Ms. Kenrick here? We'll move to our next panel. Representatives from PGW and Christina Coltro, Universal Services.

Please identify yourself for the record and proceed with your testimony.

Yes. My name is Tom Knudsen. I'm President and CEO of PGW. And with me this afternoon is Christina Coltro. She is manager of our universal services. This is the lady who administers all of our income support services. I 93 2/20/03 - TRANSPORTATION - RES. 020748 would also like to compliment her publicly. She is also probably single-handedly brought millions of dollars to Pennsylvania and to Philadelphia and to PGW through the LIHEAP and Crisis Programs. If you'll permit me, Mr. Chairman, I'll go forward with my comments.

That's fine.

First of all, I'd like to thank you for the testimony to testify on Resolution 11 No. 020708 regarding the Discount Program. We have, in addition to preparing testimony, also provided the panel with responses to questions that you propounded.

We're really grateful for that the answer you gave us.

Thank you, Councilman Ortiz. Again, Ms. Coltro. Over the course of the last two-and-a-half years, current management and employees at PGW have worked hard to make Philadelphia citizens proud of their gas company once again and to make PGW work for them. It has not been easy. Substantial changes have been made in every aspect PGW operations. PGW is a better 94 2/20/03 - TRANSPORTATION - RES. 020748 company. PGW better serves its customers because PGW has changed the way it does business. But PGW cannot and has not done it without necessary resources. Resources that can only come from our customers. Although progress has been incremental and sometimes subject to forces outside of our control, PGW's management team has achieved a dramatic turnaround. Just before discussing the Discount Program, I'd like to highlight just a few of these accomplishments so that that also puts the issues of where the Senior Citizen Discount fits into a perspective. Together with our union, the folks at PGW have effected substantial cost savings over the last several years, in the tens of millions of dollars. In achieving these savings, we have also addressed a number of major operational challenges. We have repaired the billing collection and customer service system, which was implemented in 1999, and which resulted in 55,000 processing errors and 70,000 estimated or unbilled accounts. Today the BCCS, our billing sytem, generates very few errors, well below industry standards. 95 2/20/03 - TRANSPORTATION - RES. 020748 We've also substantially reduced the outstanding receivables, which were always a major problem for us. PGW has also made significant strides in customer service. In Fiscal '02, it improved its in-house call center performance sufficiently to prevent a potential PUC order that it contract for those services. In 1999 PGW customers waited an average of almost minutes to talk with a service 12 representative. With the implementation of its customer service initiative in July of 2001, PGW has successfully managed and trained personnel and now achieves the mandated standard of answering 80 percent of its calls in 30 second, moving from the last position in the Commonwealth in August 2001 to within the PUC standard by December of that same year. PGW has been fairly consistent in staying within this rigorous standard ever since. In December 2002 PGW also instituted a guaranteed 48-hour response time to service calls from customers enrolled in its Parts and Labor Plan. PGW also persuaded the PUC in August 2002 to permit it to implement a 96 2/20/03 - TRANSPORTATION - RES. 020748 weather-normalization adjustment. This adjustment, which is unprecedented in Pennsylvania, but implemented in other states, benefits PGW and its 5 customers by helping to stabilize the utility's 6 finances and billing charges against the vagaries of 7 winter weather. This winter PGW has already reduced 8 customer heating bills by more than $3 million 9 dollars through January and over $5 million through 10 February. 11 Another important element of the change 12 of PGW is the mandated restructuring of our rates in 13 general, and the Senior Citizen Discount program in 14 particular. And here I will read from the prepared 15 text. 16 First, I would like to give you some 17 background regarding the program. It is important 18 to understand how this program is constructed. There are presently 79,500 senior citizen customers, all of whom enjoy a 20 percent across the board benefit. Unlike the Water Department Senior Citizen Discount, PGW's program is not means tested. PGW's senior citizen customers thus enjoy a discount regardless of income or means. This discount is paid for by all other PGW rate payers who support 97 2/20/03 - TRANSPORTATION - RES. 020748 the discount through an increase in their rates. Currently that increase is about $20 million across all customers of all economic capability.

There is no other program in the City or the State, of which I am aware, that permits a utility discount solely on the basis of age and not on the basis of at least some need. As you know, the 1999 Gas Choice Act transferred jurisdiction over certain PGW matters from the Philadelphia Gas Commission to the Pennsylvania Public Utility Commission. We've heard that from the speakers this afternoon. The Act speaks directly to PGW's Senior Citizen Discount Program, specifically current senior citizens or those senior citizens who will have entered the Senior Citizen Discount Program prior to September 1st of this year will continue to receive the Senior Citizen Discount until or unless City Council modifies the discount. Were there to be no such change initiated by City Council to alter the present program, and assuming a life span of 80-plus years, the Senior Citizen Discount will be existence for at least 17 more years. Regarding new seniors, meaning those who might wish to enter the program 98 2/20/03 - TRANSPORTATION - RES. 020748 after September 1st, the Pennsylvania Public Utility Commission will determine the nature of the program for that group. Since there is no appeal to the Gas Choice Act pending, the decision of the Pennsylvania Public Utility Commission in this matter will be final. That decision will occur during the course of a restructuring proceeding that is currently taking place before the Pennsylvania Public Utility Commission and is expected no later than April 1st of this year. In the ongoing restructuring proceeding, and with the direction and approval of the Philadelphia Facilities Management Corporation, which is our Board of Directors, PGW has reluctantly -- and I emphasis reluctantly -- proposed to discontinue the present Senior Citizen Discount Program prospectively starting September 1st of this year. In other words, those seniors in the program on August 31st will remain in the program and continue to get exactly the subsidy they do at present. However, after September 1st, there will be only discounted rates available to senior citizens on a means tested basis through the through the Customer Responsibility Program. 99 2/20/03 - TRANSPORTATION - RES. 020748 There is no joy in my being here today, but there are three reasons for PGW's position. First, the financial condition of the company requires that those who can pay, must pay. PGW presently has among the highest rates in the entire state. We do not have any real room to raise rates beyond where they are now. The Senior Citizen Discount now costs, as I indicated, remaining customers approximately $20 million a year. That is roughly $35 a year for the average residential heating customer. Secondly, there is the basic issue of equity that management and our Board dealt with. Currently, hundreds of thousands of customers struggle to pay their utility bills. These are people of all means. We know that approximately 150,000 of our customers, about a third of our customers, live at or below 150 percent of the poverty level. That means that all of them also are responsible for each of the subsidy programs. We thought it was simply unfair for them to subsidize customers who have the ability to pay. Third, the means testing benefits for senior citizens can result in more senior citizens 100 2/20/03 - TRANSPORTATION - RES. 020748 taking advantage of programs for which they might qualify. For example, many seniors are taking the percent discount without exploring whether they 5 could be eligible for the CRP discount. 35 percent of 8 their gross household income will start to benefit 9 from this program on a sliding scale. The more the 10 income level declines, the more the benefit grows. 11 In the absence of the current Senior 12 Citizen Discount Program, according to our studies, 13 over 20,000 senior citizens could potentially enroll 14 in the CRP Program over the next several years and 15 obtain significant benefits.

16 PGW has arrived at what it views as a 17 compromise position with great reluctance, but with 18 the recognition that something had to be done to 19 ease the financial burden on the company and its 20 non-senior customers. And the company is not alone. A number of public groups and persons have recommended a similar course. In 1999 the City Controller suggested reexamining the Senior Citizen Discount in his book, "Philadelphia - a New Urban Direction. 101 2/20/03 - TRANSPORTATION - RES. 020748 The change in the Senior Citizen Discount Program does not signal a retreat from PGW's long-term commitment to assist customers struggling to pay their gas bills. PGW recognizes that it has a special responsibility going forward to be sure that senior citizen customers are assisted in getting the help they require. PGW has been in the forefront of providing services to customers having difficulty paying their bills since the 1970s. For decades, PGW has offered payment assistance and energy conservation programs to its customers. PGW's current programs include the Customer Responsibility Program, that's a customer assistance program, the Conservation Works Program, a conservation and weatherization program, LIHEAP Outreach, which includes crisis grants, and the Hardship Fund, through the Utility Emergency Services Fund. 7 million in federal support for PGW customers and will spend $1 million in support of UESF. PGW's support is over and above the funding 102 2/20/03 - TRANSPORTATION - RES. 020748 support provided annually by the City's housing programs. PGW remains committed to helping its low-income customers, including seniors, stay on the system. We believe the proposed Senior Citizen Discount Program achieves that end and I hope that this information is of use and is helpful to you. I want to thank you for the opportunity to appear today, and certainly Ms. Coltro and I will be happy to answer whatever questions you might have.

Any questions from the Committee? The Chair recognizes Councilman Ortiz.

Mr. Knudsen, I'll make several statements in terms of the PUC. You said, in essence, that the PUC mandated the change. And the language that was read by Mr. Weinstein, for example, really can give to another interpretation. And it says, "The SCD program was initiated by action of City Council, which had legislative oversight of PGW. PGW has a received a response to the management audit and received a secretarial letter from the Commission in starting to prepare alternatives to submit to City Council." 103 2/20/03 - TRANSPORTATION - RES. 020748 You haven't submitted any alternatives to City Council.

No, we have not.

Why not? Before going to the PUC, why did you not come to City Council and say, we have this problem?

Well, there are two aspects of this. One is that we propose no changes to the program as it exists. Everybody --

Well, you propose eliminating it after September 1st.

We proposed it prospectively, going forward.

Then that is a change to the program. (Applause.)

That is correct.

If you're prospectively going to eliminate it, that is a change in the program. But you did not come to the body of City Council and you did not send anything to the President of City Council saying, the Gas Works is going to he eliminate this program prospectively. We have recommended to the PUC that 104 2/20/03 - TRANSPORTATION - RES. 020748 they do so.

Well, two responses to that. One is, that PGW management and the Board of Directors looked at this hard and long. This was the most complicated decision that the Board made. We were attempting to strike a balance between what we perceived as the needs of the company to survive and the various rights of the constituent groups of customers that we have. We know that there are tens upon tens upon tens of thousands of our customers who are not senior citizens, who also cannot meet their bills on a monthly basis.

This is a program that was initiated by City Council. You came to us when you needed $45 million and we went out and did it. We gave you $45 million, which hasn't been paid back, but that's fine. An issue that affects a the great multitude of senior citizens in this City, you have no qualms about not even consulting with the Council at all.

Well, the issue is before the PUC right now.

But you put it before the PUC before you even came to us. I mean, this is 105 2/20/03 - TRANSPORTATION - RES. 020748 a very significant change in public policy that we're dealing with here. In terms of this City's and this Body's response to a problem that we saw 30 years ago. You just say the City has no interest in keeping this program and you recommend to the PUC that it be eliminated. I find that incredibly insulting to us. (Applause.)

Well, there was certainly no insult meant. What we were attempting to do was to essentially save the company.

I commend you for that. Let me tell you, I told before you, I think you have done a management and a half much better than the three previous executive officers that we had. Obviously, that's not a high bar to achieve.

I'll take your compliment.

But with the integrity and the honesty that you have, we do commend that and we respect that. But this is a program that should not, cannot be not be changed without coming through us. And you should have known that.

Well, that is what the law 106 2/20/03 - TRANSPORTATION - RES. 020748 allows. That is absolutely correct. The option is continuously before this Body, if this Body wants to change or propose to the PUC what it wants to do, then it has that right to do that.

But unless the senior citizens made us aware of what you had done, we would not have been aware of it.

Well, I didn't realize that you -- this filing made over a year ago -- made last July.

We didn't know.

I didn't know that you didn't know.

I have no letter, no 16 correspondence from you saying, we are planning to do this? Do you. Mr. Cohen? Do you, Mr. Goode?

No. 21

No. In fact, Mr. Knudsen has refused to take any calls from me for a long time. I stopped calling him because it's a waste of time. In fact, he has a new policy: Don't talk to Councilmembers unless they agree with you. 107 2/20/03 - TRANSPORTATION - RES. 020748

Mr. Cohen, I would take your call anytime, believe me.

Well, I haven't been able to reach you. I've called you on a number of occasions.

Councilman Cohen, Councilman Ortiz has the floor.

Can you tell me how you achieved that $35 number, that roughly $35 a year for the average residential heating customer?

That's correct.

Can you give me how you achieved that number?

It's very simple. $20 million is what we know we transfer from the senior citizens to the rest of the customer body. We know that there are 57 billion cubic feet of gas sold. It's simply a matter of dividing one into the other.

I'm not an accountant. And I know that accountants can really do with numbers a lot of things.

It's an honest number.

I'd like to look into 108 2/20/03 - TRANSPORTATION - RES. 020748 that further.

I will give you the computation. Ms. Coltro can.

Fine. Just the other day I was reading -- because President Bush wants to shift, in essence, the burden of the people who receive government assistance, welfare or Medicare, other things, to a means test situation. And they're not doing it, in essence, in order to provide a greater degree of services. They're doing it because every study that has been done in terms of government programs and assistance in this country has shown that once you shift that, a huge number of people fall through the cracks and do not get the services and the assistance that they need. So when anybody says to me, we're going to shift to the means test, it means to me that they're taking away the net that we put there, and that a lot of people will suffer for this. We have a great number of people today that do not -- it's been put in the testimony, do not receive the medical assistance insurance because of many of the forms they have to go through and fill out. And I think that this -- it sounds good. It sounds good: If you have 109 2/20/03 - TRANSPORTATION - RES. 020748 $150,000 and you live in a mansion in Chestnut Hill, why should you get a PGW discount? Sounds good. But the vast majority of the people that that change is going to affect do not live in mansions in Chestnut Hill. They live in rowhouses in North and West Philadelphia and in other places in this City. So I cannot understand how you decide to implement such a drastic change to public policy in this City without prior consultation with this Council. I just cannot for the life of me understand that. We would ask you right now, really I would ask you, that you write the PUC taking back your recommendation until this Council -- (Applause.)

-- until this Council decides what the public policy of this City should be on this issue. Because we do not want that agency to act upon your recommendation thinking that it has the support of this legislative body when it doesn't. So I want you to make it very clear that until and when this Body decides to act on this -- and it will be soon -- that the PGW management does not -- and takes back the issue of recommendation of elimination of the Senior Citizens Discount. 110 2/20/03 - TRANSPORTATION - RES. 020748

I would be pleased to write the Chairman and inform him of the intent of this Committee.

Thank you. (Applause.)

The Chair recognizes Councilman Cohen.

What happens currently, Mr. Knudsen, when a senior citizen dies, how does the Gas Works recompute their records to make a change in the billing for that property, or does it do that at all?

Well, we are having corrected a whole series of things that have gone wrong with our tracking of customers. We are now in a position to essentially start a program to make sure that those who are on the program are still appropriately receiving the benefit.

Do you feel confident that those people who now receive the Senior Citizen Discount are entitled to it?

All those customers who do enjoy the discount today, if I understand your question, will continue receiving those discounts. 111 2/20/03 - TRANSPORTATION - RES. 020748

That was not my question. My question was, whatever the number is of -- how many do you say exist that get billed as senior citizens?

We have 79,500 customers.

Are you confident that all of those 79,500 are entitled under the current rules, not the ones the PUC is considering, how do you know that they're still entitled to receive that discount?

Yes.

When did you last make the check?

The answer to the question is, we are not a 100 percent sure.

What percent are you sure?

We don't know exactly, but we presume that most of these people who are coming through are entitled to the program. We are now going into a program that we haven't done for many years of verifying participation, which is to say, verifying that people are still in the residence, are of the appropriate age, and are receiving gas. 112 2/20/03 - TRANSPORTATION - RES. 020748

Well, it would certainly seem to me that before you would even contemplate presenting to City Council any intent to change, you would want to have up-to-date information. Mr. Chairman, with your leave, I would like to ask that this testimony be suspended for a short time to permit two witnesses who have knowledge with respect to this matter to testify briefly. Would both of you prepared to remain for a few minutes?

Absolutely.

Would the two witnesses who believe that the records are faulty please approach the dais. Mr. Chairman, swear them in.

Please identify yourself proceed with your testimony.

My name is James Lennox, L-E-N-N-O-X, and I am a union representative for Local 686. MR. NARDELLA (ph): Joseph Nardella, and I am also a representative for Local 686.

Which of you would 113 2/20/03 - TRANSPORTATION - RES. 020748 like to speak first with respect to the question I've raised of Mr. Knudsen?

I'll start off by saying the number 79,500, who Christine has said she believes is eligible for this program, the last time they did any checking on the Senior Citizen Discount, we used to get a listing from the City, who got it from, I believe, the state Social Security Department, which we used to check records of people who have passed away. That hasn't done been at least in the last eight to 10 years, that I'm aware of, because I used to do that job. I've been out of that department that handles that work for the past eight years and it hasn't been done, in my knowledge, up until that time. They used to have what was called a "dead letter". What would happen is, we'd compare a list from Social Security with Social Security numbers of people receiving the 20 percent discount at PGW. If we had definite information that the customer was deceased, we canceled that discount immediately. If there was any question of whether or not maybe a child's name and a father's name -- father-son or mother-daughter had the same name and we needed proof that either 114 2/20/03 - TRANSPORTATION - RES. 020748 one was still alive to receive that discount, we would send out what was called at PGW at that time a "dead letter." You would be still receiving that discount for a period of 90 days. You had 90 days from the time you received that letter to come into PGW's office with proof that you're still alive and you should be receiving that discount. In my own opinion I would say that that number 79,500, I would say at least to 20,000 of those people do not 11 belong on that discount. And we believe that if 12 management did a better job policing the Senior 13 Citizen Discount, every senior who is eligible for 14 the discount should receive it. There's no reason 15 they should have to cut that discount in any way, as long as they provided the service to make sure and check records to make sure that customers that are receiving the discount do indeed live at that property and should remain on that program to receive that discount. You can have someone who is on a Senior Citizen Discount -- I worked the telephones at PGW. I have people that call in on those lines that are new customers who moved into a property a year ago that are just now applying for service. They've used gas under somebody else's 115 2/20/03 - TRANSPORTATION - RES. 020748 name who was receiving a percent discount on a bill for up to year that should have never been. These people are not eligible for that program, but yet they've taken rate payer money that they should have never got percent off the bill. These 7 people should have been paying a full bill every 8 month and yet their using gas under somebody else's 9 name receiving a discount that is not rightfully 10 theirs. 11

No one condones that 12 improper use, but it seem that PGW think it's easier 13 to crack down on senior citizens than to take the 14 necessary steps to be efficient. 15 (Applause.) 16

When the program was 17 policed and checked on a monthly basis, you didn't 18 have the problems that you have with seniors. There 19 was never any talk of canceling the Senior Citizen 20 Discount because the people who were on that program did indeed belong on that program and should receive that 20 percent discount.

Does the other gentleman have any testimony to add?

I work in a district office 116 2/20/03 - TRANSPORTATION - RES. 020748 and a lot of times --

Please identify yourself for the record.

James Lennox. The way we police it in the district office, when we find out that someone passed away, it's usually through one of their children coming in applying for LIHEAP, and we ask for the customer of records, that information or Social Security or any kind of information to that effect, we find out that that person has passed away and that's when we change the gas out of their name and put it in the proper person's name and we eliminate the discount.

Are you agreement with the testimony given by the person next to you would be saying?

Yes, I am.

Thank you both for testifying. Thank you for being here and giving us this information. Thank you. (Applause.)

Would the previous panel return to the table?

Mr. Knudsen, what is 117 2/20/03 - TRANSPORTATION - RES. 020748 your response to -- the young woman also.

I'm not sure where Mr. Nardella gets the size number that he does. We have no indication of that. The issue for us is that there have been numerous problems with the billing system, with tracking our customers and so forth. We have done what we had to do in order of priority. We are now in a position to implement this kind of screening program or more accurately reinstitute it and Ms. Coltro is in the process right now, within weeks of doing so. We will have a much more accurate count on the senior citizen complement within a relatively short period of time. But I do not subscribe to the numbers that have been presented without some proof.

But you have know basis to disagree. You have no information at all.

That's correct. He and I disagree on -- I don't think that there's that order of magnitude, but we will find out as soon as we're able to screen these folks.

Well, it seems to me that before you would ever contemplate this kind of a severe change in your plans that you would want to 118 2/20/03 - TRANSPORTATION - RES. 020748 make sure that everything fully is in order, that you've taken every step to make sure that the programs are being honestly and competently administered, because there may be great savings in that. We know the waste of money that was involved when they changed the computer system. Wasn't there a computer system you ordered a couple of years ago that cost about $35 million and then proved not to work at all?

60 to 90 what?

$90 million.

So the record of the company, if we call it that, although I think there are serious questions as to whether you're a company or not. But assuming that you are a company, the company's record of efficiency is not such a breached confidence. And it would seem to me that before you would want to punish so many senior citizens and run the risk of denying service to people that earn the service at cost they can afford that you would certainly want to make sure that everything is done to economize properly and to see that there are not any people, through your own inefficiencies, that are taking advantage to the 119 2/20/03 - TRANSPORTATION - RES. 020748 system. We want the system to work honestly and efficiently. We assume that, that's the reason you haven't been asked any questions. We had assumed that you were handling these, but apparently you have done nothing in the last eight to years, as 7 the witness testified, to check on that. 8

Your admonishment is 9 received and, as I indicated, I can do more than to 10 say that the program is about to be launched to essentially clean up our file and we will have the appropriate information and can present that to you.

Now, let me go back to the matter raised by Councilman Ortiz, because I'm not quite sure what your answer was to his question as to what you ought to write to the PUC. Are you going to withdraw the request from the PUC so that they have nothing before them considering a change in the senior citizen status, at least until a later date?

I have to check with counsel as to what we can do at this point. But the record before the PUC right now is, it has five or six briefs before it, from "do away with it all immediately" to "keep it the way it is 120 2/20/03 - TRANSPORTATION - RES. 020748 indefinitely." So the PUC can receive information right now from parties, in this instance from the City Council, I think it would be probably received, indicating their interest in a particular solution.

You requested the elimination of it.

We requested the elimination of the program as it's presently constituted and would place in instead a means --

That's what I'm saying. You requested the elimination of the program prospectively as of September.

That's correct.

So there isn't a lot of briefs in front of them so that they have to choose from column A and column B. You made a very specific recommendation.

But we are only one of four or five parties to this proceeding. Each of them has expressed their particular position on this.

But we are not.

You are not a party to this. 121 2/20/03 - TRANSPORTATION - RES. 020748

This is a public policy established by this Council. And this Council has not been consulted in the change of this public policy.

And I said I would write to the Chairman and tell him that, in fact, that is your position.

That's not our position. That's the facts. Are you saying you don't believe us?

No. 13

Is that what you're telling us?

Absolutely not.

Are you denying the right of City Council to have set that policy?

No. 19

Then by what right did you assert your right to go to the PUC and say, "We want an Ordinance that was passed by City Council, the legislative body of City Council, we want you to ignore that and change that policy"?

Because on the advice of my counsel I was informed that following September 122 2/20/03 - TRANSPORTATION - RES. 020748 1st, it is not a matter of public policy for this Body. It shifts to the PUC to determine.

Who is your general counsel? Who gave you that advice?

Our regulatory counsel in Harrisburg.

Was that advice given orally or in writing?

Oh, I'm sure it's in both forms.

May we see a copy of that?

If it isn't in that specific form, I'll have him write a letter to that effect. We've been working under that assumption.

Wouldn't that put you under a special obligation to inform City Council that you believe, on advice of your counsel, that you believe that as of September 1st or whatever date you believed it to be, that the authority of City Council was going to lapse and, therefore, you had no reason to do anything about it except to ignore it? You didn't ignore City Council when you 123 2/20/03 - TRANSPORTATION - RES. 020748 needed funds, did you? You came to us. You pleaded with us. You said the question of the vitality and life of PGW was only a matter of days unless we acted. And many of us had serious concerns because we knew the City also had problems. We acted in good faith only to find ourselves now paid no 8 attention to. When you needed us, you listened politely. You worked with us. We worked with you. Now, apparently, you feel that the financial crisis of PGW is over, at which time you ought to be expanding the benefits to senior citizens, but instead, it seems like you're cutting back on them.

Let me be very specific, Councilman Cohen. The crisis at PGW is far from over. We specifically had to ask for an extension on the repayment of the $45 million to 2006.

Well, I'm dead set against any extension unless in the first place, this request made to the PUC is strictly withdrawn.

Well, I will consult with counsel. Coming back to Mr. Ortiz's question. Our understanding was that you had complete control on the program through August 31st. Come September 124 2/20/03 - TRANSPORTATION - RES. 020748 1st, those rights shifted to the PUC for determination.

Was that advice put in writing or not?

I believe it was. It was certainly in all conversations. I'm sure it's in writing and I'll get you what we have.

But you cannot say for certain whether that advice was put in writing?

We have a filing this thick. There were advisory letters from them and I'm sure in one of those --

Let me try to help you out a little bit. Let me suggest that if that advice was put in writing, it might have prompted you to come to City Council. My assumption is that that advice was not put in writing. Now, is that true or is that not true?

The advice that we got was that it passed from City Council to the PUC. And so there was this jurisdictional issue.

So the advice was not to end the Senior Citizen Discount. The advice was not to take a particular position on it. 125 2/20/03 - TRANSPORTATION - RES. 020748

The advice was that we needed to put a position before the PUC that the PUC would determine.

Was the advice limited to Council's jurisdiction, or was the advice related to what position PGW should take regarding the PUC?

More the latter than the former, but I will look to see whether there was communication on the former.

Councilman Ortiz.

Thank you, Mr. Chairman. I'm just baffled. It says here, "Does the Gas Choice Act authorize the City to modify the Senior Citizen Discount Program. The issue here is that the Act further specified that City by Ordinance -- that means us -- is the only entity which may make any further change in the Senior Citizen Discount program. The PUC may not, on its own initiative or the initiative of any party, directly alter the Senior Citizen Discount Program or refuse to take the cost of the discount into account when it is setting PGW's rate nor make PGW 126 2/20/03 - TRANSPORTATION - RES. 020748 on its own alter the Senior Citizens Discount Program as currently grandfathered by the General Assembly. If City Council takes no action then the program will terminated by means of a moratoria phase out extending over the next few decades." Obviously, the Act says that we are a party involved in the actions that need to be taken. You went ahead in forum and did not consult us as to whether this is the right road that needs to be done. And the reason we're having this is that we're trying to find what the correct public policy should be. But obviously this is not the way that we thought it was going to be implemented or phased out or eliminated. It's kind of hard to get notice of issues such as this through newspapers, but that's how we found out about this. That's why the Resolution was done. We found out. Some people and some individuals called us up and said, "Do you know this is happening?"

Well, I was not aware of --

Will Mr. Bertocci please approach the witness table? A simple question, Mr. Bertocci. In 127 2/20/03 - TRANSPORTATION - RES. 020748 your research on this issue, you mentioned a possible drafting of a Bill. Have you, in fact, drafted a Bill or would you be prepared to draft a Bill?

I have never drafted a Bill. I would be prepared to assist in the drafting of a Bill once City Council decides what kind of Bill they want and it's a bill that would ostensibly be designed by City Council to induce the PUC to modify the Senior Citizen Discount Program which has been grandfathered by state law. So legislature did this, the General Assembly, not even the PUC. So it's really City Council that has to come back. One other thing, if you will allow me. I disagree with Mr. Knudsen -- and, again, people debate about what this law means. But I believe that -- and I would like to see City Council pass an ordinance as soon as possible because September first is coming up. But I don't agree that after September 1st it's all over. I think that at any time after September 1st Council could come and say, "This is what we want to do," but you're still going to have to get the PUC to approve.

That's actually where 128 2/20/03 - TRANSPORTATION - RES. 020748 I'm going. From your legal knowledge of the Gas Choice Act and what it does to Senior Citizen Discount and the role in jurisdiction of Council within that Act, do you believe that if a Bill was introduced and passed by Council and if it became law, that before September 1st, before the PUC makes a decision, or before this would take effect September 1st, that that supersedes the recommendations of PGW?

What's going to happen next is PGW has a restructuring plan that is supposed ruled on by the PUC by April 1st. And that --

My question is, if a Bill were to be drafted, introduced and passed by this Council, with your legal understanding of the Gas Choice Act and how it affects Senior Citizen Discount, would that legislative action supersede any recommendation made by PGW?

I think it would go forward on a different track. It's the PUC that ultimately has to approve.

I understand that. I'm talking about how the Gas Choice Act was 129 2/20/03 - TRANSPORTATION - RES. 020748 written. I'm asking you for -- from your knowledge of the actual Act itself, there was a role carved out for City Council. Some people said, begging out for Council's voice since Council created the Senior Citizen Discount. If a bill was drafted, introduced and passed before April 1st, do you think that that's not, in fact, what the Gas Choice Act calls for and that would take precedent over any other brief or opinion offered?

Well, if I said that --

I didn't ask if you said that. I'm asking for your opinion now.

I think you have to key on the fact that the PUC has to approve what happens.

I understand that.

And that's why I can't say that automatically City Council passing a Bill 20 just would veto whatever ruling the PUC had already taken.

They can't approve anything if we don't pass a Bill, though?

That's right. You have to pass a Bill. 130 2/20/03 - TRANSPORTATION - RES. 020748

Thank you.

Mr. Chairman, may I follow-up on that?

The Chair recognizes Councilman Cohen.

Mr. Bertocci, would you be prepared to present to us your best effort with respect to the kind of Ordinance -- actually, I think you're familiar with Council Ordinances because you've appeared before us on many occasions. If you could get us what, in your opinion, is the best legal approach combined with Mr. Knudsen's request to withdraw from the PUC consideration of the request previously made by PGW, that would be helpful. That would begin moving the process. We'll go from there and deal with it step by step. We know that no lawyers can ever predict in advance what judges or commissions or other bodies might ultimately determine. But what I want to know is -- because I will never vote for anything proposed to us by PGW unless PGW is prepared to acknowledge that it is City Council, and not PGW, that sets public policy in this area. That's what I think is wrong with the action taken by PGW. He has eliminated 131 2/20/03 - TRANSPORTATION - RES. 020748 City Council from the triangle of those that have influence and under law to make decisions. He has supplanted us by his own decision that he, on behalf of PGW, has more right than we have to set the policy towards the senior citizens, the Gas Works and I don't believe that's the case. If so, I want to do something to make sure that PGW does not survive because I think it would be a terrible thing to have a runaway commission uncontrolled by the City Council.

I would work with anyone who was putting a Bill together. My concern -- and this comes from me as a lawyer recognizing that I'm trying to get the approval of the PUC. I don't like the idea that the City would have to seek the approval of the PUC to maintain its Senior Citizen Discount. But the fact of the matter is, that unless the Gas Choice Act is overturned, I think we do have to obtain the approval of the PUC because the PUC has control over PGW's tariffs. Then the question is, well, how do you justify what you want to do, what we've done all this time? And my view is that you would have to do something that documents strongly the City's position, that in 132 2/20/03 - TRANSPORTATION - RES. 020748 setting up a Senior Citizen Discount without means testing, that actually what's happening is that people's financial circumstances and other personal circumstances like disability, like half of the senior citizens I believe -- some very high percentages of senior citizens have disabilities. That what you are doing is focusing a Senior Citizen Discount in such a way that it inevitably catches people that -- where you can make a case that this is a particularly vulnerable group of people with specific needs. Up until now, we talked mainly in terms of a notion of means testing which is when people talk about means testing, it's always been a notion which is, you file an application and you show exactly what your income is and go through that whole process, like applying for welfare. And obviously in this room and on both sides of the table you hear that that is absolutely a non-starter. We know that we have 80,000 people receiving the Senior Citizen Discount now have. But we may have 100,000, 115, 120,000 seniors who are customers of PGW. We don't really know. Now, if that's the case, then the so-called concern that all 133 2/20/03 - TRANSPORTATION - RES. 020748 these rich folks are getting the Senior Citizen Discount may, in fact, be simply not true. There's a lot of information out there that we do not have. And it would seem to me that in trying to craft something which has the best chance of success, which as a lawyer that's what I have to do. I have to say, look, you have a law out there and you have to do something that has the best chance of success to win. I would want to be able to put together something which is based on some demographic information. Right now, we don't sufficient demographic information. Absent from this hearing today was anybody coming in and saying in, these are really the situations of Philadelphia seniors. We have a little bit of information in the consultant's report, but very, very slim to in the PGW consultant's report, and I've pointed that out. We need much more concrete information. And CLS doesn't have the funds to get a demographer in there. I would think that basic demographic information could be worked out if we could get a demographer to do that, to sit down with us and give us some basic parameters so that we can defend what it is that we put into some kind of proposed 134 2/20/03 - TRANSPORTATION - RES. 020748 Ordinance.

Well, maybe Mr. Knudsen has a thought. I don't know how to resolve that issue. But it would certainly seem to me that between Community Legal Services and PGW, if there is the will, we certainly ought to find the way to make it clear to the PUC that it is the public policy of the City of Philadelphia to maintain the current Senior Citizen Discount. It is my personal belief, but I have no facts to justify it that most senior citizens of affluence do not request the Senior Citizen Discount. I know I've never even thought about it, because it seemed clear to me it was meant for people who needed the help. I remember speaking once to Councilman Longstreth and asking him and he said he never would have thought of applying and never has. And I haven't found any senior citizen that I've asked, a vast number of them of affluence, who said that they applied for the Senior Citizen Discount. So I believe that most overwhelmingly the people on the list, except for the kind of folks that were testified to by the two witnesses that testified just before you did, I believe the people on the list are there honestly 135 2/20/03 - TRANSPORTATION - RES. 020748 except for those that, you know, passed away and somebody continued the use of their names. Therefore I, think that the number endangered is a large number. I think there's no 6 justification whatsoever for any kind of a means test. I think that one reason PGW wants it is they know that automatically based upon historical conditions, that will automatically eliminate large numbers of people from ever applying and, therefore, denying the people the use of the Senior Citizen Discount. And in that case, PGW is in violation of City policy. It's clear to me that the City policy is what the Chairman stated before, that City Council will overwhelmingly be for this. We have a simple rule, nine votes passes an Ordinance. We would hope that the Mayor would sign it, but if not, 12 votes overrides it and just by the count, as the Chair was giving it before, I think there will certainly be far more than 12 votes to sustain the current policy's continued existence. It may be unanimity on the question. So I just think the two of you ought to get together and come up and offer to the Committee your proposals on how to clear this up. By clearing it up I mean get it off the PUC 136 2/20/03 - TRANSPORTATION - RES. 020748 agenda. It ought not to be there. We ought to save the state taxpayer money by not having the PUC waste its time considering a petition that has no vitality and no current life to it. That will happen if Mr. Knudsen withdraws it , not just informs them that he understands that City Council has a different opinion.

Two responses, Councilman. I don't know what our legal rights are. I'll get some clarification on that. The PUC will be informed of this discussion today. There's no 13 question of that. With regard to, if you charge Mr. Bertocci with the formulation of an Ordinance we will work with him to provide whatever information he feels he needs to provide substance to the appeal -- or to the proposal.

Would that be satisfactory, Mr. Bertocci, if Mr. Knudsen's words were effectively carried out by PGW?

Yes.

And would you let this Committee, the Chairman, know if there's any failure on the part of the PGW to live up to the 137 2/20/03 - TRANSPORTATION - RES. 020748 commitment Mr. Knudsen is apparently prepared to make?

Yes. But I also think that demographic information would be important in putting together something that would have the strongest possible chance of success. Ultimately the PUC is going to have to approve this.

Mr. Bertocci, by way of analogy, let me say that what you're referring to in terms of coming up with the best legally defensible Bill is somewhat like hiring the most qualified person. There is always someone who is more qualified. You have limited options before you have. What people actually set out to do is hire someone who is qualified enough. And if we find that this Bill is not qualified enough legally, as you said, in your opinion, we can always go back. It's something very simple this Council has the ability to do. We can introduce and pass legislation in a matter of weeks.

That's fine.

Thank you. There are no further questions of this panel. We will continue this hearing hopefully with 138 2/20/03 - TRANSPORTATION - RES. 020748 a Bill drafted to respond to. I thank you all for coming out. This hearing is recessed to the call of the Chair. (Council adjourned at 4:15 p.m.) - - - 139 2/20/03 - TRANSPORTATION - RES. 020748 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of February 20, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON TRANSPORTATION AND PUBLIC UTILITIES ___________________________ Lisa C. Bradley, RPR and Notary Public