[Congressional Record Volume 145, Number 15 (Wednesday, January 27, 1999)]
[Senate]
[Pages S1021-S1022]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY (for himself, Mr. Dodd, Mr.  Gramm, Mr.  Sarbanes, 
        Mr.  Murkowski, Mr.  Lott, Mr.  Mack, Mr.  Craig, and Mr. 
        Brownback):
  S. 313. A bill to repeal the Public Utility Holding Company Act of 
1935, to enact the Public Utility Holding Company Act of 1999, and for 
other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.


               public utility holding company act of 1999

 Mr. SHELBY. Mr. President, I rise today to introduce the 
Public Utility Holding Company Act of 1999. This bipartisan bill is 
designed to help America's energy consumers by repealing an antiquated 
law that is keeping the benefits of competition from reaching our 
citizens. I am pleased to be joined by Senator Dodd, Senators Gramm and 
Sarbanes, Chairman and Ranking Member of the Committee on Banking, 
Housing and Urban Affairs, Senator Murkowski, Chairman of the Energy 
and Natural Resources Committee, Majority Leader Lott, and Senators 
Mack, Craig, and Brownback in introducing this important legislation. 
Our bill, which is identical to legislation voted out of the Senate 
Banking Committee with bipartisan support in the 105th Congress, 
repeals the Public Utility Holding Company Act of 1935 (PUHCA).
  The original PUHCA legislation passed over 60 years ago in 1935. At 
that time, a few large holding companies controlled a great majority of 
the electric utilities and gas pipelines. No longer is a majority of 
the utility service offered by so few a provider. In fact, over 80 
percent of the utility holding companies are currently exempt from 
PUHCA.
  This legislation implements the recommendations of the Securities and 
Exchange Commission (SEC) made first in 1981 and then again in 1995 
following an extensive study of the effects of this antiquated law on 
our energy markets. In the 1995 report entitled, ``The Regulation of 
Public-Utility Holding Companies,'' the Division of Investment 
Management recommended that Congress conditionally repeal the Act since 
``the current regulatory system imposes significant costs, indirect 
administrative charges and foregone economies of scale and scope . . 
.''
  The regulatory restraints imposed by PUHCA on our electric and gas 
industries are counterproductive in today's global competitive 
environment and are based on historical assumptions and industry models 
that are no longer valid. Repeal will not create regulatory gaps; the 
ability of the States to regulate holding company systems, together 
with the Federal Energy Regulatory Commission's powers under the 
Federal Power Act and the Natural Gas Act render PUHCA redundant
  Our bill assures the FERC and the States access to the books and 
records

[[Page S1022]]

of holding company systems that are relevant to the costs incurred by 
jurisdictional public utility companies. As a result, the regulatory 
framework to protect consumers is not only protected in this bill, but 
enhanced.
  In the competitive environment that we now find ourselves, it is 
imperative to remove a major bottleneck that constrains the ability of 
American gas and electric utilities to compete.
  This bill has been reported out of the Senate Banking Committee in 
the last two Congresses, but due to time constraints, was never voted 
on in the full Senate. I am confident that we have the votes to pass 
this legislation this session. While it is unclear that a sufficient 
consensus exists to ensure legislative progress on comprehensive reform 
of the electric and gas industry, it is very clear that the first step 
to comprehensive reform is the repeal of PUHCA. I am pleased to 
announce, Mr. President, that a broad consensus for PUHCA repeal does 
exist, and the Senate should act on this very important legislation as 
soon as possible.
                                 ______