Worries persist about storm response if Narragansett Electric sale goes through

PROVIDENCE — On the eve of a blizzard last month that would bring heavy snow and strong winds to southern New England, National Grid mobilized a force of 3,600 line and tree crew members and other field personnel in Rhode Island and Massachusetts who were ready to respond to outages across the region.

As it turned out, while the storm on Jan. 29 buried parts of Rhode Island under more than two feet of snow, the number of calls for downed lines was minimal and only a few dozen households in the state lost power.

But there was a measure of security in the sheer number of personnel the utility was able to call in to prepare for the storm. If anything had happened, 1,000 workers were on hand in Rhode Island and another 2,600 were spread across several locations in Massachusetts, ready to be deployed where they were needed.

It’s one small example of how Rhode Island benefits from being part of a larger area in the Northeast that is served by National Grid, a system that also includes parts of Massachusetts and New York.

Now, some experts worry that things could change if state regulators approve a $5.3-billion proposal to sell National Grid’s electric and natural gas business in Rhode Island, known as the Narragansett Electric Company, to PPL Corporation, of Pennsylvania.

To be sure, PPL is a big company serving 2.5 million customers, with more than a century of experience in providing energy to homes and businesses, but its other holdings are far from Rhode Island, in Pennsylvania and Kentucky.

And more than one party arguing in the approval proceedings before the deputy administrator of the state Division of Public Utilities and Carriers has raised concerns that storm response in Rhode Island could suffer if the deal goes through.

“When you have a state — particularly the smallest state in the United States — having to rely on a utility that’s not contiguous, that can create operation problems and costs,” Gregory Booth, a consultant to the DPUC’s advocacy section, testified during a hearing that stretched over several days in December.

PPL says storm response could actually improve

Executives with PPL say just the opposite — that storm response could actually improve if the DPUC’s ruling, expected by Feb. 25, is to approve the transaction.

They argue that the distance between Rhode Island and the company’s current holdings would actually benefit the Ocean State in the event of a bad storm. That’s because the chances of a single weather system damaging electric systems in Rhode Island, and also in Pennsylvania or Kentucky, are slim.

If Rhode Island is expected to be hit hard, resources elsewhere in the PPL network would likely be available, the thinking goes. And that, company representatives contend, is actually a better situation than having one utility serving several states close to one another that could all be hammered by a storm at once.

Based on an analysis of federal weather data between 1995 and 2020, there’s only a 15-20% chance of a tropical storm in Pennsylvania or Kentucky also reaching Rhode Island, PPL says. But the likelihood of a storm in Massachusetts hitting Rhode Island too is 45-50%, according to written testimony from David Bonenberger, a PPL vice president who would head up the company’s operations in Rhode Island.

“So we feel that we’ll have more capability to provide resources to bring to bear in the event Rhode Island gets hit with severe damage,” he said in the hearing, adding that workers could be deployed to the state in advance if forecasters predict a severe storm.

Concerns over costs to ratepayers

But not everyone is convinced by PPL’s argument. The office of Attorney General Peter Neronha, which has raised a host of concerns about the sale, countered that bringing in crews from as far away as Kentucky — as opposed to Massachusetts — could cost ratepayers more money.

In his testimony, Bonenberger said the company doesn’t know how the deal would affect storm-response costs, the attorney general’s office pointed out in a filing following the hearing.

“Despite thousands of pages of document responses and days of testimony, Petitioners have not demonstrated that similar storm response performance will be achieved at the same or lesser cost as the status quo, and Petitioners have not made the bare minimum demonstration of no harm to the public in their capacity as ratepayers,” Neronha’s office wrote.

Experts working with the office have also said that ratepayers currently benefit from cost efficiencies in the way that National Grid keeps personnel and supplies at locations shared between Rhode Island and Massachusetts.

Booth, the DPUC consultant, made a similar point in regard to transformers and other electrical equipment. Narragansett Electric has access to a larger fleet of backup supplies through National Grid affiliates in New York and Massachusetts than it would if it was on its own. And much of that equipment is tailored specifically to the National Grid system. To have the same level of coverage in the region under PPL would require additional investments, Booth argued.

Hank Webster, Rhode Island director of the Acadia Center, a clean energy advocacy group that has raised other questions about the purchase, asked Booth about this at the hearing.

“Would a helpful analogy be that the National Grid family of companies are like, say, a Ford dealership and potentially the PPL companies are like a Chevy dealership, so in terms of stocking the inventory for the parts for their respective systems, there would be a change by separating out Narragansett and putting it into a new system?” Webster asked.

“Well, at a high level that’s probably a reasonable analogy, but transformers are so very specific voltage-wise, capacity-wise, winding-wise that it’s even much more different than a Chevy and a Ford,” Booth responded.

Mutual assistance pacts would help

In response to questions this week, representatives of PPL and National Grid said the companies are taking steps to ensure a smooth transition. They plan to enter into a mutual assistance agreement that would give each other access to field crews and backup equipment, including transformers, in times of need. Existing agreements with other industry groups would also roll over.

Additionally, PPL would manage storm response from a control center in Lincoln that is currently used as a backup to National Grid’s primary facility for the region in Northborough, Massachusetts.

During the regulatory proceedings, lawyers for PPL have largely dismissed the criticism, saying that opponents to the transaction are essentially arguing that no other utility can take over from National Grid unless it has the same reach into Massachusetts and New York.

“It may be likely that incumbency provides National Grid with some advantages in certain areas over the short term,” they said in a filing after the hearing. “But it is just as likely that an experienced and successful utility operator like PPL will find other ways to produce value, reduce costs, and more efficiently operate Narragansett.”

Read the full article at The Providence Journal here.