Narragansett Electric Company immediately rebranded as Rhode Island Energy.
By Steve Ahlquist for UpRiseRI
The sale is a transfer of
ownership of 100 percent of the outstanding shares of common stock of NECO.
NECO will continue to own and operate its assets and maintain all of its
franchise rights for the provision of electric and gas distribution service in
Rhode Island, under the management and control of PPL Rhode Island.
The sale was finalized after
Attorney General Peter Neronha announced
that in exchange for an agreement that secures $200 million in value for Rhode
Island ratepayers along with mandated steps toward meeting Act on Climate goals, his
office has withdrawn its objection to the Rhode
Island Division of Public Utilities and Carriers‘ (DPUC) approval of the sale. The
agreement provides benefits and protections for Rhode Islanders far exceeding
the conditions imposed by the DPUC in its February 2022 decision approving the
sale. You can read
the settlement agreement here.
The agreement provides for $50
million in ratepayer credits, and $43.5 million in discharge of bill amounts
for low-income and protected residential customers, the cost of which would
likely also be borne by ratepayers. In addition to this direct ratepayer relief,
the Attorney General has required that PPL forgo recovery of $103 million from
ratepayers: $82 million in costs for new investments it will make as a result
of the sale and $21 million of costs already incurred by National Grid. The
DPUC’s decision would have allowed PPL to seek this $103 million from
ratepayers.
The Attorney General’s
intersession has forced PPL, as the new owner of the state’s largest gas and
electric utility, to take substantial steps in addition to those previously
ordered to advance Rhode Island’s Act on Climate goals. In the proceedings before
it and ultimately in its decision, the DPUC consistently refused to apply the
Act on Climate to its review of the PPL/Narragansett Electric transaction.
At Governor Daniel McKee‘s PPL meet and greet press conference on Wednesday PPL CEO Vincent Sorgi spoke diplomatically of the Attorney General’s demands. “It’s part of the process when you do utility transactions,” said Sorgi. “We weren’t surprised that the Attorney General put forth the position that he did… We think the [DPUC] did an appropriate job on the order that they issued, but we are more than happy to age to th terms that we did with the Attorney General. [There’s a] lot of benefits for Rhode Island customers with a specific focus on low-income and special customers.”
“No job we do will be more important than delivering for our Rhode Island customers, and we’re pleased to have an experienced team comprised of PPL and former National Grid employees that is committed to providing exceptional service,” said Dave Bonenberger, president of Rhode Island Energy. Bonenberger recently moved to Warwick, Rhode Island where he will be in Senate Majority Leader Michael McCaffrey‘s district. Bonenberger could be heard telling Senator McCaffrey that he will be happy to put a lawn sign on his lawn in support of the Majority Leader’s re-election campaign.
Under its agreement with the Attorney General, PPL is required to contribute $2.5 million to the Rhode Island Renewable Energy Fund and up to $2.5 million to the Attorney General for retention of outside experts in anticipated Rhode Island energy proceedings that will directly impact Act on Climate Goals.
Furthermore, in all future filings with RI utility regulators, PPL must include a written assessment of potential impacts on the Act on Climate’s requirements. In addition, PPL must hire a third-party consultant and establish a stakeholder process to create an Act on Climate report.
This report is necessary to provide Rhode Islanders with
specific and important information about next steps for climate efforts throughout
the state, including energy efficiency program analysis and capacity for solar
interconnection and distributed energy. The agreement also requires PPL to
solidify other important investments in the infrastructure needed to meet
climate goals.
The DPUC in its decision failed
to take steps to ensure that the utility’ storm response not worsen under PPL
ownership. The agreement the Attorney General has reached require that PPL
ensure that Massachusetts-based storm response crews are contractually obligated
to help Rhode Island first, before other states, in a storm event.
“This Office appealed the DPUC’s
decision to the Superior Court because that decision failed to adequately
protect and advance the interests of Rhode Islanders,” said Attorney General Neronha.
“Up front, it applied the wrong legal standard in reviewing the proposed
transaction, requiring a showing far less than what the law requires. In terms
of substance, the DPUC would have allowed PPL to impose millions of dollars of
transition and other costs on Rhode Islanders, who didn’t seek this transaction
and already pay plenty of money for the energy they use. It missed an
opportunity to return money to Rhode Islanders by failing to require PPL to
provide entirely justifiable rate credits, which this agreement now includes.
It failed to ensure adequate storm response given that PPL has its main base of
operations significantly farther away than National Grid does. And it
completely ignored a generational opportunity to address the state’s climate
goals in the perhaps the most important context of all: how our energy is
produced and delivered. Today’s agreement remedies all this.
“The time to address Rhode
Island’s energy delivery system and climate future is now, in this context, not
elsewhere and not later. Wherever and whenever necessary, this Office will
continue to fight for Rhode Islanders. Because Rhode Islanders deserve no
less.”
You can watch the Attorney
General’s press conference here:
As is standard practice in transactions of this nature, as the seller, National Grid will continue to provide some transition services to the Rhode Island business to maintain operational continuity. National Grid is committed to ensuring Rhode Island customers continue to enjoy the same standard of safe and reliable gas and electric service throughout the transition process as they have experienced under National Grid’s ownership.
“National Grid has taken enormous
pride in being part of the Rhode Island community. In partnership with our
customers, we have achieved so much – from nation-leading energy efficiency
programs to the first offshore wind farm in the country,” said John Pettigrew, Chief Executive
Officer, National Grid. “It has been a privilege to serve Rhode Island and I
offer my heartfelt thanks to the many colleagues who have kept the lights on
and gas flowing for our customers and communities every day.”
The LNG/liquefaction facility at Fields Point is
owned by a different entity, National
Grid LNG LLC, and was not included as part of the sale. The
LNG/liquefaction facility will continue to be operated by National Grid LNG
LLC. The approval of the liquefaction facility, over the objections of the local
community, was plagued by bad faith actions on the part of, [former] Governor
Gina Raimondo’s administration, National Grid, and the Coastal Resources
Management Council. See: here, here,
and here.