PROVIDENCE, R.I. (WPRI) — Attorney General Peter Neronha is seeking to halt the sale of National Grid’s Rhode Island electric and gas operations, arguing the energy companies have failed to show how the deal would be in the best interest of residents.

The R.I. Division of Public Utilities and Carries this week approved the $3.8 billion deal between London-based National Grid PLC and PPL Corp., a Pennsylvania-based energy company that would gain 780,000 new customers as a result of the sale.

On Thursday, Neronha appealed the decision to R.I. Superior Court and filed for a stay in the deal, arguing the approval was granted even though it remains unclear whether the sale would result in increasing costs to ratepayers or help the state meet its greenhouse gas emission-lowering goals.

“It is critical that the transacting parties provide assurances that the sale will be consistent with the public interest, will not result in the degradation of services and rate increases for Rhode Islanders, and will meet requirements under the Act on Climate,” Neronha said in a statement.

The deal has been under regulatory scrutiny ever since the two energy companies announced the agreement last year. If executed, PPL would pay National Grid $5.3 billion and assume $1.5 billion of its debt in exchange for control of its local operations, known formally as Narragansett Electric Co. Following the regulatory approval Wednesday, PPL President and CEO Vincent Sorgi said he was pleased with the decision and “excited about the opportunity to serve Rhode Island families and businesses.”

“PPL has a long history of delivering safe, reliable, affordable energy and award-winning customer satisfaction in the regions it serves,” Sorgi said in a statement. “And as we proceed to close this transaction, we look forward to welcoming Narragansett’s talented team into our PPL family and to working together to deliver outstanding results for Rhode Islanders.”

The company is seeking to complete the transaction next month, although Neronha’s challenge could delay the timing. In his appeal, Neronha expressed concern that the deal would give PPL a monopoly over the local natural gas and electric distribution system, an ownership stake he said worked in favor of ratepayers with National Grid because the energy company has similar operations in Massachusetts and New York that resulted in cost savings.

“After closing on the transaction, Rhode Island will cease to benefit from these synergies,” Neronha wrote in the appeal.

He also raised concerns that the deal does not “sufficiently provide assurances” that PPL could create a storm response and provide the necessary IT services without increasing costs to ratepayers. In addition to scrutinizing the details of the deal, Neronha also criticized regulators for making what he called a hurried decision that demonstrated a “clear error of law and abuse of discretion in its failure to apply the standard” required under state law.

“I am concerned about the legal standard that was used by the hearing officer in reaching the decision – a legal standard that creates a low threshold for approval of these significant transactions that would potentially leave Rhode Islanders at future risk,” he said in a statement.

In its 334-page decision delivered Wednesday, state regulators laid out the legal argument for why the deal was approved after a “thorough examination of the record.”

Citing the legal standard applied to these types of deals, Hearing Officer John Spirito explained the companies successfully demonstrated that the purchase and sales agreement wouldn’t result in the diminishing of services, and that the terms are “consistent with the public interest.”

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.