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The day after Rhode Island regulators approved the proposed sale of the state’s largest gas and electricity distribution utility, Rhode Island Attorney General Peter Neronha filed for an emergency stay of the decision pending an appeal by his office.
In an appeal filed Thursday in state Superior Court, the attorney general’s office cited a host of deficiencies in the Division of Public Utilities and Carriers’ review of the proposed purchase of Narragansett Electric by Pennsylvania-based PPL Corp. They included a failure to consider how the transaction might impact the state’s ambitious climate goals.
Allowing the transaction to proceed could result in “extensive and irreparable harm” in the form of significant rate increases, and reduced and/or more costly storm response, the office said.
“It is critical that transacting parties provide assurances that the sale will be consistent with the public interest, will not result in a degradation of services and rate increases for Rhode Islanders, and will meet requirements under the Act on Climate,” Neronha said in a statement.
The appeal represents the first major test of the act’s mandates. Adopted last year, it obligates all state agencies and commissions to address the impacts on climate change mitigation, adaptation and resilience when exercising their authority.
Just last month the attorney general’s office filed a brief with the division that warned that approval of the sale could be subject to reversal if regulators failed to meet those obligations. It argued that has not happened, as PPL Corp. has “eschewed any obligation to set forth concrete plans about how the transaction will further Rhode Island’s climate goals.”
“Departure from the statutorily mandated standard may be grounds for reversal,” the brief said.
Margaret Curran, a senior attorney for the Conservation Law Foundation, an intervenor in the proceedings, said the appeal did not come as a surprise.
“The attorney general’s office, the division’s own Advocacy Section, Acadia Center, Green Energy Consumers Alliance and CLF all made the point that now that Act on Climate has been passed, it’s clear from the language that it should have been considered as part of what the division needed to look at,” she said.
PPL Corp. did not immediately respond to a request for comment on the appeal.
The company announced almost a year ago that it had agreed to acquire Narragansett Electric from its parent company, National Grid, for $5.3 billion (including the assumption of $1.5 billion in debt). A utility holding company, it operates three electric and gas utilities providing service in Pennsylvania, Kentucky and Virginia.
State law requires approval from the Division of Public Utilities, which must determine that “the facilities for furnishing service to the public” will not be diminished, and that the terms of the sale are “consistent with the public interest.”
In his appeal, the attorney general said the record does not contain enough evidence to prove that PPL meets that standard. He also faulted the division for setting a “compressed procedural schedule” that failed to allow for “a meaningful review of the proposed transaction.”
But the division’s decision, signed by hearing officer John Spirito Jr. and administrator Linda George, concludes that PPL has met its burdens under the law.
On the issue of Act on Climate mandates, it argues that because the Executive Climate Change Coordinating Council, representing a host of state agencies, is charged with coordinating the state’s climate change efforts, “the division finds that it would be inappropriate for the division to sidestep the important and inevitable efforts from these agencies to work cooperatively, and with other stakeholders, to advance the state’s environmental and emissions goals.”
Further, it said, “PPL has made it clear that it will enthusiastically abide by all regulatory requirements designed to advance the state’s climate goals.”
The attorney general first raised red flags about the sale of Narragansett Electric last year, when experts hired by his office to evaluate the proposed transaction said PPL had offered “little in the way of proposals” to meet the state’s aggressive greenhouse gas reduction goals.
The law mandates that the state must achieve greenhouse gas emissions reductions of 45% from 1990 levels by 2030, 80% by 2040, and net-zero emissions by 2050.
PPL has pushed back on suggestions that it isn’t prepared to comply with the Act on Climate. In a post-hearing brief, the company noted that it has extensive experience in distributing renewable energy, including wind and solar, and in managing interconnections efficiently.
“There is no evidence that PPL either cannot or will not continue to fully embrace and support Rhode Island’s renewable energy goals,” the company said.
Hank Webster, Rhode Island director for the Acadia Center, noted that the state Energy Facility Siting Board recently invoked its responsibilities under the Act on Climate in another proceeding involving Narragansett Electric.
That proceeding involves obtaining siting board approval to operate a temporary liquified natural gas facility in Portsmouth as a wintertime emergency backup system for gas customers on Aquidneck Island. In addition, the company is studying longer term solutions to the supply problems there.
Acadia, as an intervenor, is calling for Narragansett to meet customers’ energy needs through “energy efficiency and weatherization, demand response programs, and electrification to reduce gas demand back down to levels that could be supported by the existing gas infrastructure,” and without the seasonal facility, Webster said.
The siting board, citing the Act on Climate, has ordered Narragansett to provide a comparison of the greenhouse gas emissions impacts of the final proposal it comes up with versus the impacts of the various alternatives.