[Federal Register Volume 59, Number 129 (Thursday, July 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16488]


[[Page Unknown]]

[Federal Register: July 7, 1994]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26077; File No. S7-19-94]

 

Roundtable Discussion To Inaugurate Comprehensive Study of 
Regulation Under the Public Utility Holding Company Act of 1935

AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of roundtable discussion.

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SUMMARY: This is to give notice that the Commission will conduct a 
roundtable discussion on July 18 and July 19, 1994, at the Willard 
Hotel, Washington, DC, beginning at 8:30 a.m., to inaugurate a 
comprehensive study of regulation under the Public Utility Holding 
Company Act of 1935. The public is invited to attend.

FOR FURTHER INFORMATION CONTACT:
William C. Weeden, Associate Director, (202) 942-0545, Office of Public 
Utility Regulation, Division of Investment Management, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

SUPPLEMENTARY INFORMATION: The Commission will conduct a roundtable 
discussion on July 18 and July 19, 1994, at the Willard Hotel, 
Washington, DC, beginning at 8:30 a.m., to inaugurate a comprehensive 
study of regulation under the Public Utility Holding Company Act of 
1935 (``1935 Act'').
    The 1935 Act was New Deal legislation, enacted by Congress to 
eliminate abuses that had plagued the United States electric and gas 
utility industry and threatened the interests of investors and 
consumers. The statute is complex and far-reaching. Although there have 
been fundamental changes in the industry in the past sixty years, the 
1935 Act has remained largely unchanged.
    The Commission believes that it is time to undertake a thorough 
evaluation of the 1935 Act, to review the regulatory framework in light 
of developments in the industry, and to consider how federal regulation 
of utility holding companies can best serve the public interest and the 
interest of investors and consumers in the approaching century.
    To that end, the Commission recently announced that it will 
undertake a comprehensive study of the 1935 Act.\1\ The study will be 
inaugurated by a roundtable discussion in which representatives of the 
industry, state, local and other federal regulators, consumer groups, 
trade associations, an economist, investment banks, rating agencies and 
others will participate. The public is invited to attend. The agenda is 
set forth below:
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    \1\See Testimony of the Honorable Richard Y. Roberts before the 
Subcommittee on Energy and Power of the House Committee on Energy 
and Commerce (May 26, 1994).
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Roundtable Agenda

Monday, July 18, 1994

Morning Session

8:30 am--Opening remarks of Chairman Arthur Levitt
8:45 am--Introductory remarks by staff of the Division of Investment 
Management
9:00 am--The future of the industry

    There have been profound changes in the gas and electric 
industries over the past few years. The Energy Policy Act of 1992, 
in particular, has accelerated the development of a competitive 
electric industry, and freed United States companies to invest in 
utility operations around the world. The momentum in this area is 
not abating--retail wheeling is only the most recent issue. How will 
the profile of the industry change in coming years? What role, if 
any, is envisioned for a federal holding company statute in this 
evolving industry?

Afternoon Session

1:30 pm--State and federal regulation

    A federal holding company statute should supplement, not 
supplant, the work of the Federal Energy Regulatory Commission and 
state and local regulators. What is the role of a federal holding 
company statute in the regulation of the gas and electric utility 
industry? Given the roles of the Federal Energy Regulatory 
Commission and state and local regulators, is a federal holding 
company statute necessary for effective regulation?

4:50 pm--Questions and comments
5:30 pm--Session ends

Tuesday, July 19, 1994

Morning Session

8:30 am--Opening remarks by Commissioner Richard Y. Roberts.
8:45 am--Brief remarks by staff of the Division of Investment 
Management
 9:00 am--Financings and intrasystem transactions

    What protections are provided by review of financing 
transactions under a federal holding company statute? Is this review 
still necessary in light of developments in other federal and state 
regulation? If so, how could this review be made more effective and 
efficient? Is federal oversight of intrasystem transactions needed 
to prevent affiliate abuses, or can the Federal Energy Regulatory 
Commission and the states effectively safeguard the interests of 
consumers?

10:50 am--Integration and exemption

    The requirement of a single integrated public-utility system was 
intended to ensure economical and efficient utility operations. Are 
the interests of investors and consumers still served by this 
requirement? Has the requirement of geographic integration affected 
the development of creative solutions to the production and delivery 
of energy?
    Should the law prohibit foreign ownership of United States 
public-utility companies? If so, why and under what conditions?
    The law currently exempts certain types of holding companies. Do 
the theories underlying these exemptions remain valid? Should the 
exemptions be changed in light of recent developments? Are 
additional exemptions needed?

Afternoon Session

1:30 pm--Diversification

    Has the requirement that nonutility interests be ``functionally 
related'' to a system's core utility operations demonstrably 
benefited investors and consumers of registered holding companies? 
What has been the experience of companies that were not similarly 
constrained?
    Should there be limits on diversification by utility holding 
companies? How would increased diversification affect the ability of 
the Federal Energy Regulatory Commission and the states to protect 
the interests of consumers? When would the risks associated with 
diversification outweigh the potential benefits?

4:00 pm--Questions and comments
5:00 pm--Session ends

    Based upon the roundtable discussions and its own review, the 
Commission will thereafter invite public comment generally on every 
aspect of the 1935 Act and specifically on certain issues. The comments 
will be incorporated in a report and recommendations at the conclusion 
of the study.

    Dated: July 1, 1994.

    By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-16488 Filed 7-6-94; 8:45 am]
BILLING CODE 8010-01-M