A Rhode Island agency overseeing the acquisition of Narragansett Electric by PPL (NYSE:PPL) provided its official approval on Wednesday, overcoming the last major regulatory hurdle in the $3.8 billion deal with National Grid (NYSE:NGG).
The Rhode Island Division of Public Utilities and Carriers provided its final 334-page report and order on the acquisition after several months of public testimony and filings, determining that the deal would not adversely impact customers in the state.
“The division finds that after a thorough examination of the record in this docket, including the many public comments that were offered, the evidence demonstrates: that the facilities for furnishing service to the public will not thereby be diminished [if the petition is approved], and that the purchase … [and] sale … and the terms thereof are consistent with the public interest,” it said.
The announcement comes just days after PPL’s fourth-quarter earnings call in which the deal was a primary discussion topic among the company’s leadership and stakeholders. (See PPL Announces Losses, Dividend Cut in Q4 Call.)
PPL spokesman Ryan Hill said the company was “pleased” that the division approved the sale of Narragansett. It will announce the completion of the acquisition upon close, which CEO Vince Sorgi said last week could occur as soon as March.
“We appreciate the division’s thoughtful consideration of our petition for approval,” Hill said. “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 received FERC approval for the purchase of Narragansett in September, but the utility needed final approval from the division for the deal to go through. (See FERC Approves PPL Acquisition of Narragansett.)
In filings and testimony last year regarding the acquisition, staff from the office of Rhode Island Attorney General Peter Neronha opposing the deal, saying PPL provided insufficient information to ensure ratepayer protection and that more protections needed to be required as part of the approval.
The AG staff also said compliance with Rhode Island’s 2021 Act on Climate should be a condition of approval. The state climate law, signed in April by Gov. Dan McKee, requires a net-zero economy in the state by 2050, but National Grid and Narragansett have claimed the emissions-reduction statute does not apply to public utilities. (See Rhode Island Makes 2050 Net-zero Target Legally Binding.)
During last week’s earnings call, Sorgi said the company was confident it would ultimately win approval for the acquisition. He said PPL has been a “clear leader” in the development and deployment of the kind of smart grid technology Rhode Island will need in achieving its decarbonization goals in the Act on Climate.
The deal was first announced almost a year ago. (See PPL to Sell UK Business, Acquire Narragansett Electric.) It gives Pennsylvania-based PPL its first foothold in ISO-NE after operating in PJM since its inception.
National Grid spokesman Ted Kresse said the sale is a transfer of “ownership of 100% of the outstanding shares of common stock” of Narragansett. Narragansett 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.”
“We look forward to completion of the sale,” Kresse said.