Binding bids were submitted Jan. 31 for the privatization of Philadelphia’s municipal gas distribution system which, like other northeast utilities, is unable to win rate increases it needs to replace its old, brittle cast iron pipe with cathodically protected pipe at a fast-enough rate.

Sources believe the city received two bids in the range of its financial advisor’s estimate of $1.5 billion— net of $880 million in debt and termination payments, $128 million in unfunded pension liabilities and $20 million in transaction fees. Both bids include a rate freeze of at least three years.