Narragansett Electric now ‘Rhode Island Energy’ with $3.8B sale finalized

Updated at 3:38 p.m.

NATIONAL GRID on Wednesday announced the sale of Narragansett Electric Co. to PPL Rhode Island Holdings LLC, a subsidiary of the Pennsylvania-based PPL Corp. The closing of the $3.8 billion deal also comes with a name change for the longtime Rhode Island power business, which will now be known as Rhode Island Energy. / COURTESY PPL CORP.

PROVIDENCE – Rhode Island’s primary utility business is now under new ownership.

National Grid on Wednesday announced the sale of Narragansett Electric Co. to PPL Rhode Island Holdings LLC, a subsidiary of the PPL Corp. The closing of the $3.8 billion deal also comes with a name change for the longtime Rhode Island power business, which will now be known as Rhode Island Energy, “reflecting both the company’s commitment to Rhode Island and its pursuit of a cleaner energy future in line with the state’s renewable energy and net-zero goals,” PPL said in a statement.

The Pennsylvania-based company wasted no time in launching their campaign as a local operation. Hours after announcing it had formally taken ownership of the state’s gas and electric business, PPL executives met with  Gov. Daniel J. McKee and state lawmakers to lay out their plans for a Rhode Island-based company, including a locally-based president and operations and call center.

“It’s nice to have a local company rather than some multinational corporation from Europe,”  House Speaker K. Joseph Shekarchi, D-Warwick, said, speaking to reporters at the State House Wednesday.

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David Bonenberger, a top PPL executive who has been tapped to lead Rhode Island Energy, moved to Warwick last month ahead of the deal closing. The company is also investing $20 million to renovate an existing National Grid building in Cumberland to serve as a customer call hub and control center, according to PPL CEO Vincent Sorgi.

In an interview with PBN Wednesday, Bonenberger said the transition will be his top focus, both for the former National Grid workers now under PPL’s domain and for customers. Bonenberger, who is credited for helping to modernize the electric grid in Pennsylvania, said that same technology will be applied to shore up Rhode Island’s grid against outages and storms.

Sorgi sought to assuage concerns by environmentalists and consumer advocates by stressing the company’s commitment to state decarbonization goals and ratepayer protections, many of which are enshrined in a settlement deal reached with the Rhode Island Office of the Attorney General earlier this week. The Attorney General and other consumer protection groups contested the sale previously because they said it would increase ratepayer costs and put the state’s climate change mandates at risk.

Under the settlement unveiled earlier this week, PPL has agreed to extra protections and payments for ratepayers totaling $200 million. The company also cannot seek an increase in base gas and electric rates for the next three years, per the terms of the original approval by state regulators, and must include analysis of the Act on Climate Decarbonization law in its future plans and policies.

“The Act on Climate law is one of the things that attracted us most to Rhode Island,” Sorgi said.

While the extended hearing process by state regulators and ensuing lawsuit by the attorney general pushed back the initial transaction closing date, it should not affect the timeline of the takeover, which will include transition services from National Grid over the next two years.

In a statement, National Grid highlighted the collaborative process of the deal, which was also subject to “extensive regulatory review” by both federal and state regulators.

“National Grid has taken enormous pride in being part of the Rhode Island community,” John Pettigrew, CEO of National Grid, said in a statement. “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. 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 sale was part of a larger deal between the two companies announced in March 2021, in which PPL sold its United Kingdom electricity business to National Grid, and used part of the $10.2 billion proceeds to acquire Rhode Island’s gas and electric business.

PPL, which also provides power to 2.5 million customers primarily in Pennsylvania and Kentucky, will pick up approximately 743,000 Rhode Island gas and electric customers under the now-finalized sale.

National Grid will retain ownership of its natural gas liquefaction facility at Fields Point in Providence, which is owned by a different subsidiary and was not part of the sale, the release stated.

(Update: information from afternoon news conference added through out with comments from PPL CEO Vincent Sorgi and House Speaker K. Joseph Shekarchi.)

Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.

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