[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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