R.I. regulators approve PPL purchase of Narragansett Electric

The attorney general’s experts had raised concerns about what the sale would mean for electricity and gas customers and whether the new owners are ready to help meet Act on Climate goals

Electrical power lines.Waldo Swiegers/Bloomberg

PROVIDENCE — The state Division of Public Utilities and Carriers on Wednesday approved the transfer of the Narragansett Electric Company – National Grid’s electric and gas business for customers in Rhode Island – to PPL Corporation.

Experts for the attorney general’s office had raised concerns about what the sale of the Narragansett Electric Company could mean for Rhode Island electricity and gas customers and whether the new owners are ready to help the state meet new greenhouse-gas reduction goals.

But the Division of Public Utilities and Carriers said “after a thorough examination of the record,” including many public comments, the evidence shows “that the facilities for furnishing service to the public will not thereby be diminished” by approving the transaction.

And the evidence demonstrated that the purchase and sale is “consistent with the public interest,” the division concluded.

In March, the companies announced that the Narragansett Electric Company would be sold to PPL for an equity value of $3.8 billion. But the purchase required regulatory approval. And Attorney General Peter F. Neronha’s office intervened when the petition came before the Division of Public Utilities and Carriers.

Narragansett Electric is the largest electricity transmission and distribution service provider in Rhode Island, and it is a natural gas distributor in the state, serving some 780,000 customers. Based in Allentown, Pennsylvania, PPL has about 2.7 million customers.

In written testimony, the attorney general’s experts, Mark D. Ewen and Robert D. Knecht, noted that last year, Rhode Island enacted the Act on Climate, which makes the state’s goals for reducing greenhouse gas emissions mandatory and enforceable.

“Recent changes in Rhode Island policy will require a more aggressive approach for reducing carbon emissions associated with electric supply, for overall gas usage, and for distribution services,” the experts wrote. “At this time, PPL has offered little in the way of proposals to expand upon (National Grid’s) current policies and activities to begin to address this new policy environment.”

The Act on Climate has implications for Narragansett Electric whether it’s owned by National Grid or PPL, and it’s not enough for PPL to simply say it will follow National Grid’s existing environmental policies, Ewen and Knecht said.

In Wednesday’s decision, the Division of Public Utilities and Carriers noted the experts’ comments and said PPL has indicated it would abide by all the laws and regulations.

“PPL has committed to step into National Grid’s shoes with respect to all existing programs and initiatives, including its energy efficiency programs and renewable energy procurement processes,” the division concluded. “PPL has also made several long-term commitments in support of its efforts to comply with the Act on Climate and to demonstrate its pursuit of a robust renewable energy agenda.”

For example, PPL has agreed to submit a report to the division within a year of the closing on its “specific decarbonization goals” and the long-term strategy for the gas distribution system, the division said.

The Act on Climate sets mandatory goals for the state to reduce greenhouse gas emissions: 45 percent below 1990 levels by 2030, 80 percent below those levels by 2040, and at “net-zero emissions” by 2050. And it calls for the Executive Climate Change Coordinating Council, consisting of officials from a variety of state agencies, to come up with a plan to hit those targets.

The Division of Public Utilities and Carriers said critics were in effect arguing that the Act on Climate compels both the division and PPL to act immediately, without any additional process or involvement from the Commission or the Executive Climate Change Coordinating Council.

But the Act on Climate requires the division to assist the council in meeting those goals, so it would be “inappropriate” for the division to “sidestep the important and inevitable efforts from these agencies to work cooperatively, and with other stakeholders, to advance the state’s environmental and emissions goals,” the division said.

Blake Collins, a spokesman for the attorney general’s office, said, “At this time, the office is reviewing the decision.”

Kai Salem, policy coordinator for the Green Energy Consumers Alliance, said the group is disappointed in the division’s decision. She said the alliance opposed the sale because PPL and National Grid failed to demonstrate that the sale is in the public interest.

“The utility company is charged with implementing many clean energy programs that are crucial to meeting Act on Climate goals,” Salem said. “PPL failed to demonstrate that they would be able to administer those programs as well as National Grid does, especially given National Grid’s shared experience in New York and Massachusetts, two states that share Rhode Island’s ambitious climate goals.”

The alliance is especially disappointed by the failure to consider the Act on Climate mandate and the climate crisis, Salem said.

“The division’s decision indicates that it’s the sole responsibility of the (Executive Climate Change Coordinating Council) to act on climate, when the law specifically makes it a part of all agencies’ responsibilities to administer,” she said. “The climate crisis is unavoidably part of the public interest.”

Wednesday’s decision underscores the importance of climate legislation at the General Assembly this year, such as a bill to require that 100 percent of electricity sold in Rhode Island be generated from renewable sources by 2030, Salem said. “We can’t bank on the goodwill of a utility company to meet our climate goals,” she said.