There's little doubt that "PUHCA" is one of the more obscure laws under the jurisdiction of this committee, yet it's important to recognize that when it was originally enacted, in 1935, it was one of the most important securities laws created as part of the new deal reforms that followed the financial catastrophes of the great depression.
Nor should we forget that puhca was enacted primarily as investor protection law, not as a ratepayer protection law. That's why administration of the statute was placed and kept in the securities and exchange commission, rather than in FERC's predecessor, the Federal Power Commission.
Today, many of puhca's requirements have been rendered obsolete by the success of other federal securities laws and by the successful regulation of the energy industry by state and federal authorities.
Of course, at the time PUHCA was enacted, over sixty years ago, these other statutes and regulatory bodies were either in their infancy or did not even exist.
In light of the maturation of both securities and utility regulation, it is appropriate ask ourselves if the specific restrictions contained in puhca are still necessary.
Careful consideration of the issue leads me to agree with the SEC that the answer is "no." That is why I am very pleased to be an original cosponsor of S.621, which will repeal the archaic sections of PUHCA and transfer regulatory authority over the remaining utility holding companies from the SEC to FERC, where it rightly belongs.
Let me cite just one provision of PUHCA that demonstrates how anachronistic this law has become. Unlike any other industry in America, the registered holding companies were required to seek sec approval before they issue or sell securities.
This is clearly an outdated and unnecessary statutory provision - which applies to no other group of companies in the country. While the SEC has long recognized, through regulatory action, that this is an outmoded requiremen, it is high time for Congress to arrive at the same recognition and remove from the books these statutory restrictions that made sense in 1935, but make little sense today.
Mr. Chairman, the legislation under consideration today is the result of a diligent effort by this committee to work with the SEC, FERC and the state utility commissioners to fashion a bill that would first ensure that FERC and the states maintain all the tools necessary to fully regulate the utility holding companies while eliminating the barries to competition.
Last year, the result of that effort, s.1317, was passed by this committee with the support of all three of those regulatory bodies -- no mean feat. S. 621 is virtually identical to legislation and I hope that we can move with all due speed to a mark-up of it.
I would like to address one final point, Mr. Chairman, before we turn to our three panels of distinguished witnesses. Ever since we embarked on this effort to repeal PUHCA, my office has heard from those
interests who, while expressing no substantive disagreement with the legislation, urge this committee to delay action until such time when congress considers a gargantuan energy deregulation bill.
Those interests see PUHCA repeal as a bargaining chip they can use to extract concessions on issues that fall outside the jurisdiction of our committee.
I, for one, have never been a fan of making the enemy of the good; nor am I supportive of failing to take one significant step forward in the hope of trying to leap a record 20 steps forward instead. Take one in the record.
Mr. Chairman, I believe that the evidence and the hearing record will clearly demonstrate that there are ample regulatory and statutory structures in place to fully protect both investors and ratepayers without forcing these companies to endure the expense and burden of complying with this outdated statute.
I applaud you for pushing this initiative forward, and look forward to working with you on
its eventual passage.
Home | Menu | Links | Info | Chairman's Page