Senate Approves Repeal of PUHCA

Amid expressions of bipartisan amity, the Senate approved energy legislation Tuesday that would give dealmakers and other non-energy companies long-awaited entrée into the U.S. power utility sector. Despite the 85-12 vote, however, the legislation faces considerable opposition in conference committee, where lawmakers will attempt to reconcile the Senate bill with a very different House-approved energy bill.
Both bills would repeal the 1935 Public Utility Holding Company Act, which regulates deals involving power utilities. But a host of other issues could yet derail a final bill, foiling PUHCA's repeal for the third time since 2001. President Bush, who wants PUHCA repealed, has asked for a bill that he can sign by the August congressional recess.

What is PUHCA? Could the repeal lead to more Enrons?
The Public Utilities Holding Company Act (PUHCA) is a cornerstone New Deal financial reform signed into law in 1935. It was the biggest battle in FDR's first term. Utilities had become cash cows for power moguls who created complex holding company pyramids for milking ultra-reliable ratepayer income to feed speculative investments. The crash of 1929 knocked these structures flat and took down millions of small investors who had been sold on the reliability of utilities as an investment.
Does any of that sound familiar?
Both the House and Senate versions of the energy bill now contain the PUHCA repeal provision. At the insistence of Democrats, the Senate added in some extra oversight by FERC (Federal Energy Regulatory Commission), but it is a thin reed compared to PUHCA.
Supporters of PUHCA point out that for 50 years, we have had reliable, cheap electric power that has allowed strong economic growth, and that no PUHCA-regulated energy holding company has ever gone bankrupt. Furthermore, it was partial PUHCA repeals in the 1990s that opened the door to Enron, Westar and other energy debacles. To repeal PUHCA now is equivalent to blowing up the barn after the horses have escaped, never mind shutting the barn door. [from AlterNet.org]