PPL Corp. receives approval from Rhode Island court to acquire Narragansett Electric
PPL Corporation received clearance from the Rhode Island Superior Court this week to buy the Narragansett Electric Co. from National Grid USA.
The approval follows a settlement agreement between PPL and the Rhode Island attorney general’s office. The attorney general’s office had appealed an earlier order from the Rhode Island Division of Public Utilities and Carriers approving the acquisition. The Superior Court dismissed the appeal, and the two sides reached a settlement agreement.
As part of the settlement agreement, PPL has agreed to provide $50 million in bill credits to Narragansett Electric customers, both gas and electric, and seek RI Public Utility Commission (RIPUC) approval to forgive more than $43 million in arrearages for low-income and protected customers — approximately $21 million of which is already reserved on Narragansett Electric’s books.
In addition, PPL must forgo the potential recovery of transition costs associated with the acquisition and integration of Narragansett Electric and write off more than $20 million in current regulatory assets on Narragansett Electric’s books. The regulatory assets are related to information technology and cyber costs incurred by National Grid that PPL will not use.
Also, PPL agreed not to impose any base rate increases for at least three years after the transaction closes. In addition, the company will submit an Act on Climate Report within one year of the acquisition to the RIPUC and attorney general’s office. Finally, PPL will make a $2.5 million contribution to the Rhode Island Commerce Corporation’s Renewable Energy Fund and make available an additional $2.5 million to the attorney general’s office to use, if necessary, to evaluate the Act on Climate Report.
“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. “We have said throughout the approval process that PPL would bring clear value to Rhode Island, and the additional commitments announced today will provide direct and indirect benefits to customers that we believe will form the basis of a constructive and long-lasting presence in the state. At the same time, the acquisition will provide PPL with a more diversified portfolio of assets, reduce the proportion of revenues derived from coal generation as part of our business mix, and create additional opportunities to invest in a sustainable energy future.”
PPL and National Grid can now proceed to close on the transaction. PPL expects to complete the acquisition this week.
Based in Allentown, Pa., PPL provides electricity and natural gas safely to 2.5 million customers in the United States.
