Latest / Blog•Mar 22, 2022

Acadia Center Raises Concerns over Proposed Sale of Narragansett Electric

Transaction Risks Setting RI Back on Climate Action

Background

In Spring 2021, National Grid petitioned regulators to approve a proposed sale of its Rhode Island electric and gas utilities to PPL, a Pennsylvania-headquartered corporation. Acadia Center intervened as a party in the regulatory proceedings case to ensure the Division of Public Utilities and Carriers (DPUC) properly evaluated the proposed transaction’s impacts on climate change, energy justice, and public safety. Throughout the hearings, Acadia Center built an evidentiary record that demonstrates the transaction could set back efforts to meet Rhode Island’s climate mandates. In particular, PPL lacks National Grid’s experience with regard to climate-forward regulatory environments, energy efficiency programs, decarbonized heating approaches, and remediation of hazardous fossil gas leaks. Click here to read Acadia Center’s full closing brief in the regulatory proceedings .

Despite this, in late February, the DPUC approved the transaction, disregarding application of Rhode Island’s Act on Climate to the regulatory proceeding. Rhode Island Attorney General Peter Neronha immediately appealed the decision, asserting the DPUC applied the incorrect legal standard in not considering climate impacts as required by the Act on Climate. Acadia Center applauds the AG’s swift action in working to ensure the Act on Climate is not overlooked, and is working to ensure that, regardless of the corporate ownership structure, the Narragansett Electric Company is on track to achieve the GHG emissions reductions mandated by the Act on Climate.

PPL Currently Lacks Experience in Climate-Focused Jurisdictions

PPL Lacks Experience in Climate-Focused Jurisdictions

Acadia Center is a lead advocate supporting Rhode Island’s 2021 Act on Climate law, championed by Senator Environment Committee Chair Dawn Euer and Representative Lauren Carson. The Act on Climate requires greenhouse gas emissions reductions across the economy, and includes new mandates that explicitly require state agencies, instrumentalities, and other state bodies to address the impacts of climate change. Utilities are also affected by these mandates insofar as they require regulatory approval for various system operation plans. . National Grid, as a corporation, has far more experience than PPL operating in jurisdictions like Rhode Island that have legally-binding climate laws and is better prepared to leverage that expertise to develop plans that ultimately strive to comply the Act on Climate.

In fact, under Acadia Center’s cross-examination at the DPUC hearings, key PPL witnesses testified they were not familiar with the specifics of PPL’s own climate strategy, updated just weeks before the start of these proceedings. Meanwhile, National Grid has established a corporate wide Net-Zero by 2050 climate commitment consistent with laws in each of its current operating jurisdictions, New York, Massachusetts, and Rhode Island, including specific commitments to decarbonize its natural gas distribution system. While Acadia Center may disagree with specific elements of National Grid’s Net-Zero strategy, having a utility with experience developing Net-Zero approaches in conjunction with state laws is a significant value to Rhode Islanders.

In thousands of pages filed in the proceeding, PPL did not offer any proposals or plans for helping Rhode Island meet its climate mandates, only promising to offer such ideas within a year of the transaction’s approval. Rhode Island needs climate action immediately to meet its 2030 requirement to reduce greenhouse gases by 45 percent below 1990 levels.

PPL Lacks Experience Administering Top Tier Efficiency Programs

Acadia Center introduced evidence demonstrating National Grid has far more experience than PPL in designing and operating nation-leading Energy Efficiency programs. The American Council for an Energy Efficiency Economy (ACEEE) ranks all three of National Grid’s jurisdictions—Massachusetts, New York, and Rhode Island in the top five nationally. Meanwhile, efficiency programs in PPL’s current jurisdictions of Pennsylvania and Kentucky rank 19th and 33rd respectively. Under Acadia Center’s cross-examination, PPL executives acknowledged that when comparing Pennsylvania efficiency investments to Rhode Island, “just the dollars invested…it appears that Rhode Island’s is pretty aggressive.” If regulators approve the transaction, PPL will face a steep learning curve with regards to energy efficiency—a cornerstone of Rhode Island’s decarbonization efforts.

PPL Has No Experience with Decarbonized Heating Approaches. National Grid is a Leader.

Acadia Center established an overwhelming weight of evidence in the record demonstrating National Grid’s experience in studying, considering, and pursuing decarbonized heating technologies would better prepare Rhode Island to decarbonize its natural gas heating network. National Grid’s geothermal networking pilot was actually approved by the Massachusetts Department of Public Utilities during the course of the Rhode Island hearings. National Grid also announced during the hearings that it will build one of the first and largest clean hydrogen blending projects in the country, to decarbonize gas heating networks in New York.

Rhode Island’s gas network has a number of distribution system challenges in Rhode Island that could be well served by similar pilots and business models. If this transaction is approved, Rhode Islanders, will lose the benefit of National Grid’s experience with this opportunity. Acadia Center’s discovery requests and cross-examination of PPL executives found PPL has no experience with geothermal networking technologies or hydrogen blending and there are no plans to pursue that in Rhode Island.

PPL Trails National Grid’s Performance on Fixing Hazardous Gas Leaks

PPL’s subsidiary gas utility in Kentucky operates a program to repair hazardous gas leaks throughout its distribution system. Based on PPL’s own data, their program has underperformed National Grid’s efforts to address these dangerous and climate damaging leaks in Rhode Island – by over 40% in some areas. Further, PPL failed to demonstrate experience coordinating addressing gas leaks with strategic electrification programs, using money that would otherwise be buried with the pipes to move away from fossil fuels entirely. Gas leaks can lead to sudden and tragic consequences for communities, including explosions and fires. Leaks also contribute significantly to climate change by venting methane, the primary component of natural gas into the atmosphere where it has a Global Warming Potential over 80 times worse than carbon dioxide. Gas leaks are prevalent in the Northeast as our region has some of the oldest gas infrastructure in the country, with portions dating back to the Civil War! Gas leaks require utilities to adopt proactive approaches of detection, categorization, remediation, and abandonment, as well as coordination with electrification.

Acadia Center Urges Conditions for Any Transaction Approval

Throughout the docket, Acadia Center established significant concerns with the proposed transfer of Rhode Island’s utility operations from the National Grid corporate family to the PPL corporate family. Acadia Center recommended the Division apply a set of additional conditions to protect Rhode Islanders, including:

  • PPL must adopt and build upon National Grid’s Net Zero by 2050 Decarbonization Strategy
  • Pause New Gas Connections Until Gas Decarbonization Strategy Filed and Approved
  • Maintenance of Effort on Rhode Island’s Energy Efficiency Plans
  • Maintenance of Effort on Rhode Island’s Hazardous Gas Leak Remediation Program
  • Accelerate Updates to National Grid’s Advanced Metering and Grid Modernization Plans Stalled by the Transaction Review
  • Protect Ratepayers from Increased Costs of New Advanced Metering and Grid Modernization Plans
  • Honor Regulatory Process for Long-Term Aquidneck Island Energy Solution

Acadia Center looks forward to continuing its work with The Narragansett Electric Company to achieve the GHG emissions reductions mandated by the Act on Climate, regardless of corporate ownership. If the transaction’s approval is ultimately upheld, Acadia Center commits to continue this work with PPL throughout the transition period and beyond and to serve as a critical connection to the communities PPL will now serve.

For more information: Hank Webster, RI Director & Senior Policy Advocate, hwebster@acadiacenter.org, 401.276.0600 ext.402

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Media:

Providence Journal February 24, 2022
https://providencejournal-ri.newsmemory.com?selDate=20220224&goTo=A01&artid=4

Energy News Network February 24, 2022
https://energynews.us/2022/02/24/rhode-island-attorney-general-seeks-emergency-order-to-block-utility-sale/

Older coverage of case: Providence Journal February 18, 2022 https://www.providencejournal.com/story/news/local/2022/02/18/what-happens-ri-storm-response-if-narragansett-electric-sold-ppl/6830486001/

Providence Journal January 18, 2022
https://www.providencejournal.com/story/news/2022/01/18/implications-narragansett-electric-proposed-sale-ppl-corporation/6514373001/