State Regulators Approve Sale of National Grid to PPL — Deal Valued at $5.3 Billion

State Regulators Approve Sale of National Grid to PPL — Deal Valued at $5.3 Billion

Last March, PPL Corporation announced it was purchasing National Grid's Rhode Island utility business, the Narragansett Electric Company, for $5.3 billion including the assumption of $1.5 billion in debt

Now, nearly a year later, state regulators have approved the deal. There was some good news for Rhode Island customers. PPL has promised no rate increase for three years and the new owners are highly rated for customer service.

PPL Electric Utilities’ residential customers continue to give their power company’s performance high marks. J.D. Power last year announced that PPL won the residential customer satisfaction award for large electric utilities in the eastern United States for the ninth year in a row.

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With the latest award, PPL has landed the top spot among large electric utilities in the region for 17 of the 22 years that J.D. Power has been conducting its electric utility residential customer satisfaction study.

The Division of Public Utilities and Carriers gave approval on Wednesday.

"The Division issued an order today in Docket No. D-21-09 approving the Petition of National Grid and PPL Rhode Island which sought authority to transfer ownership of Narragansett Electric Company to PPL Rhode Island. After a thorough examination of the record that included participation of nine parties, 17 witnesses who offered testimony, thousands of pages of discovery, four public hearings, many public comments, post-hearing briefs, and reply briefs, the Division found that the evidence met the requirements," according to the agency.

PPL’s Ryan Hill said in a statement to GoLocal, “We’re pleased that the Rhode Island Division of Public Utilities and Carriers has approved the sale of The Narragansett Electric Company to PPL. We appreciate the Division’s thoughtful consideration of our petition for approval. We look forward to the successful close of this transaction and are excited about the opportunity the acquisition will present for PPL to drive significant value for Rhode Island families and businesses and advance a cleaner energy future. PPL will announce the completion of the acquisition upon close."

The Division found that there are "sufficient safeguards" in place to minimize the rate implications from the transaction, including the following commitments from PPL:

- PPL will absorb at least 80% of all transition costs and will only seek recovery of the balance if it can demonstrate that those costs deliver incremental benefits that are quantifiable, verifiable, and demonstrable, as determined by the Commission.

- PPL has committed that Narraganset will not file a base rate case seeking an increase in base distribution rates for gas and electric service no sooner than 3 years from the date of the sale.

- PPL has agreed to establish Transition Cost accounting, reporting and monitoring procedures to apply during the distribution rate case stay-out period.

- PPL agrees not to seek recovery in Narragansett rates for any charges that National Grid assesses PPL for services provided during the transition period.

The Division also noted that several intervening parties (the Attorney General, Acadia Center, Green Energy Consumers Alliance, and Conservation Law Foundation) had argued for a broad interpretation of “public interest” to include a requirement of “net benefits” around decarbonization mandates of the Act on Climate.