[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 206 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 206
To repeal the Public Utility Holding Company Act of 1935, to enact the
Public Utility Holding Company Act of 2001, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 30, 2001
Mr. Shelby (for himself, Mr. Murkowski, Mr. Sarbanes, Mr. Gramm, Mr.
Dodd, Mr. Lott, Mr. Craig, and Mr. Crapo) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To repeal the Public Utility Holding Company Act of 1935, to enact the
Public Utility Holding Company Act of 2001, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Public Utility Holding Company Act
of 2001''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) the Public Utility Holding Company Act of 1935 was
intended to facilitate the work of Federal and State regulators
by placing certain constraints on the activities of holding
company systems;
(2) developments since 1935, including changes in other
regulation and in the electric and gas industries, have called
into question the continued relevance of the model of
regulation established by that Act;
(3) there is a continuing need for State regulation in
order to ensure the rate protection of utility customers; and
(4) limited Federal regulation is necessary to supplement
the work of State commissions for the continued rate protection
of electric and gas utility customers.
(b) Purposes.--The purposes of this Act are--
(1) to eliminate unnecessary regulation, yet continue to
provide for consumer protection by facilitating existing rate
regulatory authority through improved Federal and State
commission access to books and records of all companies in a
holding company system, to the extent that such information is
relevant to rates paid by utility customers, while affording
companies the flexibility required to compete in the energy
markets; and
(2) to address protection of electric and gas utility
customers by providing for Federal and State access to books
and records of all companies in a holding company system that
are relevant to utility rates.
SEC. 3. DEFINITIONS.
For purposes of this Act--
(1) the term ``affiliate'' of a company means any company,
5 percent or more of the outstanding voting securities of which
are owned, controlled, or held with power to vote, directly or
indirectly, by such company;
(2) the term ``associate company'' of a company means any
company in the same holding company system with such company;
(3) the term ``Commission'' means the Federal Energy
Regulatory Commission;
(4) the term ``company'' means a corporation, partnership,
association, joint stock company, business trust, or any
organized group of persons, whether incorporated or not, or a
receiver, trustee, or other liquidating agent of any of the
foregoing;
(5) the term ``electric utility company'' means any company
that owns or operates facilities used for the generation,
transmission, or distribution of electric energy for sale;
(6) the terms ``exempt wholesale generator'' and ``foreign
utility company'' have the same meanings as in sections 32 and
33, respectively, of the Public Utility Holding Company Act of
1935 (15 U.S.C. 79z-5a, 79z-5b), as those sections existed on
the day before the effective date of this Act;
(7) the term ``gas utility company'' means any company that
owns or operates facilities used for distribution at retail
(other than the distribution only in enclosed portable
containers or distribution to tenants or employees of the
company operating such facilities for their own use and not for
resale) of natural or manufactured gas for heat, light, or
power;
(8) the term ``holding company'' means--
(A) any company that directly or indirectly owns,
controls, or holds, with power to vote, 10 percent or
more of the outstanding voting securities of a public
utility company or of a holding company of any public
utility company; and
(B) any person, determined by the Commission, after
notice and opportunity for hearing, to exercise
directly or indirectly (either alone or pursuant to an
arrangement or understanding with one or more persons) such a
controlling influence over the management or policies of any public
utility company or holding company as to make it necessary or
appropriate for the rate protection of utility customers with respect
to rates that such person be subject to the obligations, duties, and
liabilities imposed by this Act upon holding companies;
(9) the term ``holding company system'' means a holding
company, together with its subsidiary companies;
(10) the term ``jurisdictional rates'' means rates
established by the Commission for the transmission of electric
energy in interstate commerce, the sale of electric energy at
wholesale in interstate commerce, the transportation of natural
gas in interstate commerce, and the sale in interstate commerce
of natural gas for resale for ultimate public consumption for
domestic, commercial, industrial, or any other use;
(11) the term ``natural gas company'' means a person
engaged in the transportation of natural gas in interstate
commerce or the sale of such gas in interstate commerce for
resale;
(12) the term ``person'' means an individual or company;
(13) the term ``public utility'' means any person who owns
or operates facilities used for transmission of electric energy
in interstate commerce or sales of electric energy at wholesale
in interstate commerce;
(14) the term ``public utility company'' means an electric
utility company or a gas utility company;
(15) the term ``State commission'' means any commission,
board, agency, or officer, by whatever name designated, of a
State, municipality, or other political subdivision of a State
that, under the laws of such State, has jurisdiction to
regulate public utility companies;
(16) the term ``subsidiary company'' of a holding company
means--
(A) any company, 10 percent or more of the
outstanding voting securities of which are directly or
indirectly owned, controlled, or held with power to
vote, by such holding company; and
(B) any person, the management or policies of which
the Commission, after notice and opportunity for
hearing, determines to be subject to a controlling
influence, directly or indirectly, by such holding
company (either alone or pursuant to an arrangement or
understanding with one or more other persons) so as to
make it necessary for the rate protection of utility
customers with respect to rates that such person be
subject to the obligations, duties, and liabilities
imposed by this Act upon subsidiary companies of
holding companies; and
(17) the term ``voting security'' means any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a company.
SEC. 4. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.
The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et
seq.) is repealed.
SEC. 5. FEDERAL ACCESS TO BOOKS AND RECORDS.
(a) In General.--Each holding company and each associate company
thereof shall maintain, and shall make available to the Commission,
such books, accounts, memoranda, and other records as the Commission
deems to be relevant to costs incurred by a public utility or natural
gas company that is an associate company of such holding company and
necessary or appropriate for the protection of utility customers with
respect to jurisdictional rates.
(b) Affiliate Companies.--Each affiliate of a holding company or of
any subsidiary company of a holding company shall maintain, and shall
make available to the Commission, such books, accounts, memoranda, and
other records with respect to any transaction with another affiliate,
as the Commission deems to be relevant to costs incurred by a public
utility or natural gas company that is an associate company of such
holding company and necessary or appropriate for the protection of
utility customers with respect to jurisdictional rates.
(c) Holding Company Systems.--The Commission may examine the books,
accounts, memoranda, and other records of any company in a holding
company system, or any affiliate thereof, as the Commission deems to be
relevant to costs incurred by a public utility or natural gas company
within such holding company system and necessary or appropriate for the
protection of utility customers with respect to jurisdictional rates.
(d) Confidentiality.--No member, officer, or employee of the
Commission shall divulge any fact or information that may come to his
or her knowledge during the course of examination of books, accounts,
memoranda, or other records as provided in this section, except as may
be directed by the Commission or by a court of competent jurisdiction.
SEC. 6. STATE ACCESS TO BOOKS AND RECORDS.
(a) In General.--Upon the written request of a State commission
having jurisdiction to regulate a public utility company in a holding
company system, the holding company or any associate company or
affiliate thereof, other than such public utility company, wherever
located, shall produce for inspection books, accounts, memoranda, and
other records that--
(1) have been identified in reasonable detail in a
proceeding before the State commission;
(2) the State commission deems are relevant to costs
incurred by such public utility company; and
(3) are necessary for the effective discharge of the
responsibilities of the State commission with respect to such
proceeding.
(b) Limitation.--Subsection (a) does not apply to any person that
is a holding company solely by reason of ownership of one or more
qualifying facilities under the Public Utility Regulatory Policies Act
of 1978.
(c) Confidentiality of Information.--The production of books,
accounts, memoranda, and other records under subsection (a) shall be
subject to such terms and conditions as may be necessary and
appropriate to safeguard against unwarranted disclosure to the public
of any trade secrets or sensitive commercial information.
(d) Effect on State Law.--Nothing in this section shall preempt
applicable State law concerning the provision of books, records, or any
other information, or in any way limit the rights of any State to
obtain books, records, or any other information under any other Federal
law, contract, or otherwise.
(e) Court Jurisdiction.--Any United States district court located
in the State in which the State commission referred to in subsection
(a) is located shall have jurisdiction to enforce compliance with this
section.
SEC. 7. EXEMPTION AUTHORITY.
(a) Rulemaking.--Not later than 90 days after the effective date of
this Act, the Commission shall promulgate a final rule to exempt from
the requirements of section 5 any person that is a holding company,
solely with respect to one or more--
(1) qualifying facilities under the Public Utility
Regulatory Policies Act of 1978;
(2) exempt wholesale generators; or
(3) foreign utility companies.
(b) Other Authority.--The Commission shall exempt a person or
transaction from the requirements of section 5, if, upon application or
upon the motion of the Commission--
(1) the Commission finds that the books, records, accounts,
memoranda, and other records of any person are not relevant to
the jurisdictional rates of a public utility or natural gas
company; or
(2) the Commission finds that any class of transactions is
not relevant to the jurisdictional rates of a public utility or
natural gas company.
SEC. 8. AFFILIATE TRANSACTIONS.
Nothing in this Act shall preclude the Commission or a State
commission from exercising its jurisdiction under otherwise applicable
law to determine whether a public utility company, public utility, or
natural gas company may recover in rates any costs of an activity
performed by an associate company, or any costs of goods or services
acquired by such public utility company from an associate company.
SEC. 9. APPLICABILITY.
No provision of this Act shall apply to, or be deemed to include--
(1) the United States;
(2) a State or any political subdivision of a State;
(3) any foreign governmental authority not operating in the
United States;
(4) any agency, authority, or instrumentality of any entity
referred to in paragraph (1), (2), or (3); or
(5) any officer, agent, or employee of any entity referred
to in paragraph (1), (2), or (3) acting as such in the course
of his or her official duty.
SEC. 10. EFFECT ON OTHER REGULATIONS.
Nothing in this Act precludes the Commission or a State commission
from exercising its jurisdiction under otherwise applicable law to
protect utility customers.
SEC. 11. ENFORCEMENT.
The Commission shall have the same powers as set forth in sections
306 through 317 of the Federal Power Act (16 U.S.C. 825e-825p) to
enforce the provisions of this Act.
SEC. 12. SAVINGS PROVISIONS.
(a) In General.--Nothing in this Act prohibits a person from
engaging in or continuing to engage in activities or transactions in
which it is legally engaged or authorized to engage on the effective
date of this Act.
(b) Effect on Other Commission Authority.--Nothing in this Act
limits the authority of the Commission under the Federal Power Act (16
U.S.C. 791a et seq.) (including section 301 of that Act) or the Natural
Gas Act (15 U.S.C. 717 et seq.) (including section 8 of that Act).
SEC. 13. IMPLEMENTATION.
Not later than 18 months after the date of enactment of this Act,
the Commission shall--
(1) promulgate such regulations as may be necessary or
appropriate to implement this Act (other than section 6); and
(2) submit to the Congress detailed recommendations on
technical and conforming amendments to Federal law necessary to
carry out this Act and the amendments made by this Act.
SEC. 14. TRANSFER OF RESOURCES.
All books and records that relate primarily to the functions
transferred to the Commission under this Act shall be transferred from
the Securities and Exchange Commission to the Commission.
SEC. 15. EFFECTIVE DATE.
This Act shall take effect 18 months after the date of enactment of
this Act.
SEC. 16. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such funds as may be
necessary to carry out this Act.
SEC. 17. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.
Section 318 of the Federal Power Act (16 U.S.C. 825q) is repealed.
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