PROVIDENCE, R.I. (WPRI) – R.I. Attorney General Peter Neronha has reached a settlement tied to his legal challenge against the $3.8 billion sale of National Grid’s Rhode Island gas and electric operations, paving the way for the deal to be completed.
The agreement comes three months after his office sought to halt the deal between National Grid and PPL Corp., a Pennsylvania-based energy company, arguing it wasn’t clear whether the sale would increase costs to ratepayers or help the state meet its climate goals.
The settlement — which Neronha says will help protect ratepayers — removes a massive legal hurdle for the energy companies to complete the transaction, which will result in PPL gaining 780,000 new customers as a result.
“This is an incredibly important transaction for Rhode Island,” Neronha said during a news conference announcing the settlement on Monday. “We have secured over $200 million in value for Rhode Islanders.”
The legal challenge had stalled a yearlong effort by PPL to purchase Narragansett Electric Co. from National Grid PLC, a deal that would result in PPL paying $5.3 billion. (Under the terms of the transaction, PPL is assuming $1.5 billion in debt, putting the net value of the deal at $3.8 billion.)
As part of the settlement, PPL has agreed to provide $50 million in bill credits to gas and electric customers; forgive more than $43 million in arrearages for low-income and other protected customers; and forgo the ability to recover transition costs associated with the deal. The energy company also said it will write off and not seek to recover more than $20 million in regulatory assets tied to technological costs currently on National Grid’s books.
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The transition and technology costs were a major focus of debate when attorneys clashed earlier this year in R.I. Superior Court over whether the deal should be allowed. Neronha’s legal challenge came after state regulators approved the deal.
Sarah Rice, deputy director of the attorney general’s public protection bureau, argued the energy companies failed to provide substantive financial information about how the deal would affect costs to ratepayers down the road, highlighting that Rhode Islanders would be on the hook to pay at least some of the more than $200 million in transition costs tied to transferring control from National Grid to PPL.
As for climate issues, PPL said it has agreed to submitting an “Act on Climate” report within one year of the deal to the R.I. Executive Climate Change Coordinating Council and make a $2.5 million contribution to the state’s Renewable Energy Fund.
“We are advancing our climate goals,” Neronha said.
As a result of the settlement, Neronha said his office was withdrawing its objection to the deal from Superior Court.
“We’re pleased we’ve achieved this outcome, which further underscores PPL’s steadfast commitment to Rhode Island customers and to advancing the state’s ambitious decarbonization goals,” PPL president and CEO Vince Sorgi said in a statement.