Repeal of PUHCA Once Again Pushed as Solution to Utility Dilemma.(Public Utility Holding Act of 1935)(Brief Article)

The Public Utility Holding Act of 1935 (PUHCA) came under attack, though not for the first time, as the Senate Committee on Banking, Housing, and Urban Affairs in late April voted to approve S. 206, a bill that would repeal the Depression-era law that restricts the ownership and operations of utilities.

The bill is "an important component of the planned federal energy policy," according to a release issued by the committee. It would transfer oversight of public utility holding companies from the Securities and Exchange Commission to the Federal Energy Regulatory Commission (FERC) and "appropriate" state agencies.

Committee Chairman Sen. Phil Gramm (R-TX) said he planned to push the bill as a stand-alone measure, since an earlier repeal effort was tied to a broader energy package that did not become law. "I think it is distinctly possible, though I hope it is not true, that repeal of PUHCA could turn out to be the only energy bill passed this year or in this Congress," he said, indicating that he didn't want to encumber the bill with amendments that might impede its passage

Repeal Failed Last Year

The Senate last year failed to approve a similar repeal plan, but experts say it has a better chance of passage this session because of the increased prominence of energy issues and statements from investor Warren Buffett that he plans to invest over $10 billion in utility companies through his Berkshire Hathaway holding company if PUCHA repeal occurs. Repeal of PUHCA would mean that such large investors would no longer have to register as utility holding companies that are subject to substantial federal regulations.

However, Trent Lott of Mississippi, the Senate majority leader, had not indicated when he intended to bring the measure to the floor and some observers noted that Lott had been cool to previous repeal efforts.

Repeal of PUHCA faces stiff opposition from consumer groups and community--owned power plants that fear a return of the electricity behemoths that once dominated the industry.