I 

108TH CONGRESS 

1ST SESSION H. R. 1627

To repeal the Public Utility Holding Company Act of 1935, to enact the 

Public Utility Holding Company Act of 2003, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 3, 2003

Mr. PICKERING (for himself and Mr. TOWNS) introduced the following bill; 

which was referred to the Committee on Energy and Commerce 

A BILL

To repeal the Public Utility Holding Company Act of 1935, 

to enact the Public Utility Holding Company Act of 

2003, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Public Utility Holding 

5 Company Act of 2003’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—The Congress finds that—

8 (1) the Public Utility Holding Company Act of 

9 1935 was intended to facilitate the work of Federal 
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1 and State regulators by placing certain constraints 

2 on the activities of holding company systems; 

3 (2) developments since 1935, including changes 

4 in other regulation and in the electric and gas indus5 tries, have called into question the continued rel6 evance of the model of regulation established by that 

7 Act; 

8 (3) there is a continuing need for limited Fed9 eral and State regulation in order to ensure the rate 

10 protection of utility customers; and 

11 (4) limited Federal regulation is necessary to 

12 supplement the work of State commissions for the 

13 continued rate protection of electric and gas utility 

14 customers. 

15 (b) PURPOSES.—The purposes of this Act are—

16 (1) to eliminate unnecessary regulation, yet 

17 continue to provide for consumer protection by facili18 tating existing rate regulatory authority through im19 proved Federal and State commission access to 

20 books and records of all companies in a holding com21 pany system, to the extent that such information is 

22 relevant to rates paid by utility customers, while af23 fording companies the flexibility required to compete 

24 in the energy markets; and 
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1 (2) to address protection of electric and gas 

2 utility customers by providing for Federal and State 

3 access to books and records of all companies in a 

4 holding company system that are relevant to utility 

5 rates. 

6 SEC. 3. DEFINITIONS. 

7 For purposes of this Act: 

8 (1) The term ‘‘affiliate’’ of a company means 

9 any company 5 percent or more of the outstanding 

10 voting securities of which are owned, controlled, or 

11 held with power to vote, directly or indirectly, by 

12 such company. 

13 (2) The term ‘‘associate company’’ of a com14 pany means any company in the same holding com15 pany system with such company. 

16 (3) the term ‘‘Commission’’ means the Federal 

17 Energy Regulatory Commission. 

18 (4) The term ‘‘company’’ means a corporation, 

19 partnership, association, joint stock company, busi20 ness trust, or any organized group of persons, 

21 whether incorporated or not, or a receiver, trustee, 

22 or other liquidating agent of any of the foregoing. 

23 (5) The term ‘‘electric utility company’’ means 

24 any company that owns or operates facilities used 
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1 for the generation, transmission, or distribution of 

2 electric energy for sale. 

3 (6) The terms ‘‘exempt wholesale generator’’ 

4 and ‘‘foreign utility company’’ have the same mean5 ings as in sections 32 and 33, respectively, of the 

6 Public Utility Holding Company Act of 1935, as 

7 those sections existed on the day before the effective 

8 date of this Act. 

9 (7) The term ‘‘gas utility company’’ means any 

10 company that owns or operates facilities used for 

11 distribution at retail (other than the distribution 

12 only in enclosed portable containers or distribution 

13 to tenants or employees of the company operating 

14 such facilities for their own use and not for resale) 

15 of natural or manufactured gas for heat, light, or 

16 power. 

17 (8) The term ‘‘holding company’’ means—

18 (A) any company that directly or indirectly 

19 owns, controls, or holds, with power to vote, 10 

20 percent or more of the outstanding voting secu21 rities of a public utility company or of a holding 

22 company of any public utility company; and 

23 (B) any person, determined by the Com24 mission, after notice and opportunity for hear25 ing, to exercise directly or indirectly (either
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1 alone or pursuant to an arrangement or under2 standing with one or more persons) such a con3 trolling influence over the management or poli4 cies of any public utility company or holding 

5 company as to make it necessary or appropriate 

6 for the rate protection of utility customers with 

7 respect to rates that such person be subject to 

8 the obligations, duties, and liabilities imposed 

9 by this Act upon holding companies. 

10 (9) The term ‘‘holding company system’’ means 

11 a holding company, together with its subsidiary com12 panies. 

13 (10) The term ‘‘jurisdictional rates’’ means 

14 rates established by the Commission for the trans15 mission of electric energy in interstate commerce, 

16 the sale of electric energy at wholesale in interstate 

17 commerce, the transportation of natural gas in inter18 state commerce, and the sale in interstate commerce 

19 of natural gas for resale for ultimate public con20 sumption for domestic, commercial, industrial, or 

21 any other use.

22 (11) The term ‘‘natural gas company’’ means a 

23 person engaged in the transportation of natural gas 

24 in interstate commerce or the sale of such gas in 

25 interstate commerce for resale. 
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1 (12) The term ‘‘person’’ means an individual or 

2 company. 

3 (13) The term ‘‘public utility’’ means any per4 son who owns or operates facilities used for trans5 mission of electric energy in interstate commerce or 

6 sales of electric energy at wholesale in interstate 

7 commerce. 

8 (14) The term ‘‘public utility company’’ means 

9 an electric utility company or a gas utility company. 

10 (15) The term ‘‘State commission’’ means any 

11 commission, board, agency, or officer, by whatever 

12 name designated, of a State, municipality, or other 

13 political subdivision of a State that, under the laws 

14 of such State, has jurisdiction to regulate public util15 ity companies. 

16 (16) The term ‘‘subsidiary company’’ of a hold17 ing company means—

18 (A) any company, 10 percent or more of 

19 the outstanding voting securities of which are 

20 directly or indirectly owned, controlled, or held 

21 with power to vote, by such holding company; 

22 and 

23 (B) any person, the management or poli24 cies of which the Commission, after notice and 

25 opportunity for hearing, determines to be sub-
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1 ject to a controlling influence, directly or indi2 rectly, by such holding company (either alone or 

3 pursuant to an arrangement or understanding 

4 with one or more other persons) so as to make 

5 it necessary for the rate protection of utility 

6 customers with respect to rates that such per7 son be subject to the obligations, duties, and li8 abilities imposed by this Act upon subsidiary 

9 companies of holding companies. 

10 (17) The term ‘‘voting security’’ means any se11 curity presently entitling the owner or holder thereof 

12 to vote in the direction or management of the affairs 

13 of a company. 

14 SEC. 4. REPEAL OF THE PUBLIC UTILITY HOLDING COM15 PANY ACT OF 1935. 

16 The Public Utility Holding Company Act of 1935 (15 

17 U.S.C. 79a et seq.) is repealed, effective 12 months after 

18 the date of enactment of this Act. 

19 SEC. 5. FEDERAL ACCESS TO BOOKS AND RECORDS. 

20 (a) IN GENERAL.—Each holding company and each 

21 associate company thereof shall maintain, and shall make 

22 available to the Commission, such books, accounts, memo23 randa, and other records as the Commission determines 

24 are necessary to identify costs incurred by a public utility 

25 or natural gas company that is an associate company of 
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1 such holding company and necessary or appropriate for 

2 the protection of utility customers with respect to jurisdic3 tional rates for the transmission of electric energy in inter4 state commerce, the sale of electric energy at wholesale 

5 in interstate commerce, the transportation of natural gas 

6 in interstate commerce, and the sale in interstate com7 merce of natural gas for resale for ultimate public con8 sumption for domestic, commercial, industrial, or any 

9 other use. 

10 (b) AFFILIATE COMPANIES.—Each affiliate of a hold11 ing company or of any subsidiary company of a holding 

12 company shall maintain, and make available to the Com13 mission, such books, accounts, memoranda, and other 

14 records with respect to any transaction with another affil15 iate, as the Commission deems to be relevant to costs in16 curred by a public utility or natural gas company that is 

17 an associate company of such holding company and nec18 essary or appropriate for the protection of utility cus19 tomers with respect to jurisdictional rates. 

20 (c) HOLDING COMPANY SYSTEMS.—The Commission 

21 may examine the books, accounts, memoranda, and other 

22 records of any company in a holding company system, or 

23 any affiliate thereof, as the Commission determines are 

24 necessary to identify costs incurred by a public utility or 

25 natural gas company within such holding company system 
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1 and necessary or appropriate for the protection of utility 

2 customers with respect to jurisdictional rates. 

3 (d) CONFIDENTIALITY.—No member, officer, or em4 ployee of the Commission shall divulge any fact or infor5 mation that may come to his or her knowledge during the 

6 course of examination of books, accounts, memoranda, or 

7 other records as provided in this section, except as may 

8 be directed by the Commission or by a court of competent 

9 jurisdiction. 

10 SEC. 6. STATE ACCESS TO BOOKS AND RECORDS. 

11 (a) IN GENERAL.—Upon the written request of a 

12 State commission having jurisdiction to regulate a public 

13 utility company in a holding company system, and subject 

14 to such terms and conditions as may be necessary and ap15 propriate to safeguard against unwarranted disclosure to 

16 the public of any trade secrets or sensitive commercial in17 formation, a holding company or its associate company or 

18 affiliate thereof, wherever located, shall produce for in19 spection books, accounts, memoranda, and other records 

20 to the extent such materials—

21 (1) have been identified in reasonable detail in 

22 a proceeding before the State commission; 

23 (2) the State commission determines are nec24 essary to identify costs incurred by such public util25 ity company; and
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1 (3) are necessary for the effective discharge of 

2 the responsibilities of the State commission with re3 spect to such proceeding. 

4 (b) EFFECT ON STATE LAW.—Nothing in this section 

5 shall preempt applicable State law concerning the provi6 sion of books, records, or any other information, or in any 

7 way limit the rights of any State to obtain books, records, 

8 or any other information under Federal law, contract, or 

9 otherwise. 

10 (c) COURT JURISDICTION.—Any United States dis11 trict court located in the State in which the State commis12 sion referred to in subsection (a) is located shall have ju13 risdiction to enforce compliance with this section. 

14 SEC. 7. EXEMPTION AUTHORITY. 

15 (a) RULEMAKING.—Not later than 90 days after the 

16 date of enactment of this Act, the Commission shall pro17 mulgate a final rule to exempt from the requirements of 

18 section 5 any person that is a holding company, solely with 

19 respect to one or more—

20 (1) qualifying facilities under the Public Utility 

21 Regulatory Policies Act of 1978; 

22 (2) exempt wholesale generators; or 

23 (3) foreign utility companies. 

24 (b) OTHER AUTHORITY.—If, upon application or 

25 upon its own motion, the Commission finds that the books, 
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1 records, accounts, memoranda, and other records of any 

2 person are not relevant to the jurisdictional rates of a pub3 lic utility company, or if the Commission finds that any 

4 class of transactions is not relevant to the jurisdictional 

5 rates of a public utility company, the Commission shall 

6 exempt such person or transaction from the requirements 

7 of section 5. 

8 SEC. 8. AFFILIATE TRANSACTIONS. 

9 Nothing in this Act shall preclude the Commission 

10 or a State commission from exercising its jurisdiction 

11 under otherwise applicable law to determine whether a 

12 public utility company may recover in rates any costs of 

13 an activity performed by an associate company, or any 

14 costs of goods or services acquired by such public utility 

15 company from an associate company. 

16 SEC. 9. APPLICABILITY. 

17 No provision of this Act shall apply to, or be deemed 

18 to include—

19 (1) the United States; 

20 (2) a State or any political subdivision of a 

21 State; 

22 (3) any foreign governmental authority not op23 erating in the United States; 
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1 (4) any agency, authority, or instrumentality of 

2 any entity referred to in paragraph (1), (2), or (3); 

3 or 

4 (5) any officer, agent, or employee of any entity 

5 referred to in paragraph (1), (2), or (3) acting as 

6 such in the course of his or her official duty. 

7 SEC. 10. EFFECT ON OTHER REGULATIONS. 

8 Nothing in this Act precludes the Commission or a 

9 State commission from exercising its jurisdiction under 

10 otherwise applicable law to protect utility customers. 

11 SEC. 11. ENFORCEMENT. 

12 The Commission shall have the same powers as set 

13 forth in sections 306 through 317 of the Federal Power 

14 Act (16 U.S.C. 825d–825p) to enforce the provisions of 

15 this Act. 

16 SEC. 12. SAVINGS PROVISIONS. 

17 (a) IN GENERAL.—Nothing in this Act prohibits a 

18 person from engaging in or continuing to engage in activi19 ties or transactions in which it is legally engaged or au20 thorized to engage on the date of enactment of this Act, 

21 if that person continues to comply with the terms of any 

22 such authorization, whether by rule or by order. 

23 (b) EFFECT ON OTHER COMMISSION AUTHORITY.—

24 Nothing in this Act limits the authority of the Commission 

25 under the Federal Power Act (16 U.S.C. 791a et seq.) 
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1 (including section 301 of that Act) or the Natural Gas 

2 Act (15 U.S.C. 717 et seq.) (including section 8 of that 

3 Act). 

4 SEC. 13. IMPLEMENTATION. 

5 Not later than 12 months after the date of enactment 

6 of this Act, the Commission shall—

7 (1) promulgate such regulations as may be nec8 essary or appropriate to implement this Act; and 

9 (2) submit to the Congress detailed rec10 ommendations on technical and conforming amend11 ments to Federal law necessary to carry out this Act 

12 and the amendments made by this Act. 

13 SEC. 14. TRANSFER OF RESOURCES. 

14 All books and records that relate primarily to the 

15 functions transferred to the Commission under this Act 

16 shall be transferred from the Securities and Exchange 

17 Commission to the Commission. 

18 SEC. 15. EFFECTIVE DATE. 

19 This Act shall take effect 12 months after the date 

20 of enactment of this Act. 

21 SEC. 16. AUTHORIZATION OF APPROPRIATIONS. 

22 There are authorized to be appropriated such funds 

23 as may be necessary to carry out this Act. 
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1 SEC. 17. CONFORMING AMENDMENT TO THE FEDERAL 

2 POWER ACT. 

3 Section 318 of the Federal Power Act (16 U.S.C. 

4 825q) is repealed.

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