PPL to buy Rhode Island electric company for $ 5.3 billion The state
Allentown, Pennsylvania – A court cleared the way for PPL to buy the Rhode Island power company for $ 5.3 billion – a deal that was stalled after the Rhode Island Attorney General filed a deferment application earlier this year.
Since then, the Rhode Island Supreme Court has cleared PPL of the possibility of acquiring The Narragansett Electric Company at the National Grid USA following an amicable settlement agreement between PPL and the Attorney General’s Office.
Orders following joint appeals by the parties to the appeal now allow PPL and National Grid to promptly close the deal.
Under the PPL amicable agreement with the Attorney General, PPL agreed:
Provide Narragansett Electric customers with $ 50 million in loans for both gas and electricity.
Seek permission from the Rhode Island Public Utilities Commission to forgive more than $ 43 million in debt to low-income customers (approximately $ 21 million of which is already reserved in Narragansett Electric’s books).
Avoid potential reimbursement of transitional costs associated with the acquisition and integration of Narragansett Electric, which PPL has already limited in its previous commitments.
Write off and do not seek to recover more than $ 20 million in current regulatory assets according to Narragansett Electric books. Regulatory assets relate to information technology and cyber-costs incurred by the National Grid that will not be used by PPL after the transition period.
In addition to the above commitments, PPL will not increase rates for at least three years after the deal closes and will not have at least a year of PPL-led work after the termination of transitional service agreements with National Grid.
PPL has also agreed to additional actions that strengthen the company’s strong commitment to modernizing and decarbonising the network. PPL will prepare and submit the Climate Reports Act within one year of acquisition to RIPUC and to the Attorney General.
The report will contribute to the Rhode Island Executive Coordinating Council on Climate Change if the council develops plans to implement the State Climate Act.
PPL will also contribute $ 2.5 million to the Rhode Island Commerce Renewable Energy Fund and provide an additional $ 2.5 million to the Attorney General’s Office for use, if the Office deems necessary, to evaluate the Narragansett Electric Climate Report Act or participate in any future RIPUC procedure that may be conducted to assess the future of the gas distribution business.
“We are delighted to have achieved this result, which further underscores PPL’s continued commitment to Rhode Island clients and advancing the state’s ambitious decarbonisation goals,” said Vince Sorghi, President and CEO of PPL.
“We have said throughout the approval process that PPL will 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 sustained presence in the state.” said Sorgi. “At the same time, the acquisition will provide PPL with a more diversified asset portfolio, reduce the share of coal revenues as part of our business mix and create additional opportunities for investment in the future of sustainable energy development.”
PPL said it expects to complete the acquisition this week and announce completion after closing.
After closing, PPL will also announce the investor’s date and time, during which PPL will provide details of its overall strategy, clean energy transition strategy, investment plans, and plans to achieve competitive long-term earnings on stock and dividend growth while maintaining one of the most strong balances in the U.S. utilities sector.