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The summer of our discontent
After years of watching one Congress after another
go right to the edge of enacting comprehensive energy legislation—and
then pull back—this looks like the year they finally go over
the edge. A Senate bill will likely be debated this month, and the
electric power industry could be seriously altered.
Unlike early efforts, when past Congresses toyed with
the idea of mandating retail electric competition nationwide, this
year's proposals make no such attempt. But like those early efforts,
the current crop would do away with the Public Utility Holding Company
Act of 1935 (PUHCA), opening the door wider for something that's
been another problematic feature of the restructuring movement.
Or maybe we should say it breaks the door down, where
utility mergers are concerned. Repealing PUHCA and diminishing federal
oversight of utility mergers could, in the view of many knowledgeable
observers, pave the way for a return to the days when most of the
electricity produced and sold in this country was controlled by
three mega-holding companies that did pretty much as they pleased.
One thing that pleased them was to set up multi-layered
holding company pyramids that effectively prevented the ordinary
utility investor from knowing who owned what.
Fraudulent accounting practices, losses to investors,
and abuse of utility customers to subsidize shaky holding company
ventures were common.
If that sounds familiar, it should. In a February
paper on the need for PUHCA, the American Public Power Association
points out that many of the problems of today's big energy companies
are traceable to a partial repeal that lured holding companies into
ventures outside their core business beginning in the early 1990s.
The full report and a number of related documents
can be viewed on the Internet at www.APPAnet.org. Once there, click
on legislative/regulatory, and then, under Federal Legislation,
on PUHCA.
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