UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Parts 365 and 366 

(Docket No. RM05-32-003, Order No. 667-C) 

Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the Public 

Utility Holding Company Act of 2005 

(Issued February 20, 2007) 

AGENCY: Federal Energy Regulatory Commission 

ACTION: Final Order; Order Denying Rehearing 

SUMMARY: By this order, the Federal Energy Regulatory Commission denies 

rehearing of Order No. 667-B. Order No. 667-B addressed requests for clarification and 

rehearing of prior orders that implemented repeal of the Public Utility Holding Company 

Act of 1935 and enactment of the Public Utility Holding Company Act of 2005. 

EFFECTIVE DATE: This order is effective on [insert date 30 days after date of 

publication in the FEDERAL REGISTER]. 

FOR FURTHER INFORMATION CONTACT: 

Lawrence Greenfield (Legal Information) 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, DC 20426 

(202) 502-6415 

Laura Wilson (Legal Information) 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, DC 20426 

(202) 502-6128 
Docket No. RM05-32-003 - 2 - 

James Guest (Technical Information) 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, DC 20426 

(202) 502-6614 

SUPPLEMENTARY INFORMATION:
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Joseph T. Kelliher, Chairman; 

 Suedeen G. Kelly, Marc Spitzer, 

 Philip D. Moeller, and Jon Wellinghoff. 

Repeal of the Public Utility Holding Company Act of 

1935 and Enactment of the Public Utility Holding 

Company Act of 2005 

Docket No. RM05-32-003 

ORDER NO. 667-C 

ORDER DENYING REHEARING 

(Issued February 20, 2007) 

1. Subtitle F of Title XII of the Energy Policy Act of 2005 (EPAct 2005) repealed the 

Public Utility Holding Company Act of 1935 (PUHCA 1935) and enacted the Public 

Utility Holding Company Act of 2005 (PUHCA 2005).1

 In Order No. 667, the Federal 

Energy Regulatory Commission (Commission) issued regulations to implement Subtitle 

F.2

 In Order No. 667-A, the Commission denied rehearing in part and granted rehearing 

 1

 Energy Policy Act of 2005, Pub. L. No 109-58, 119 Stat. 594 (2005). 

2

 Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the 

Public Utility Holding Company Act of 2005, Order No. 667, 70 FR 75592 (Dec. 20, 

2005), FERC Stats. & Regs. ¶ 31,197 (2005). 
Docket No. RM05-32-003 - 2 - 

in part of Order No. 667.3

 In Order No. 667-B, the Commission granted clarification in 

part, denied rehearing in part and granted rehearing in part of Order No. 667-A.4

 In the 

present order, we deny rehearing of Order No. 667-B. 

2. American Public Power Association together with National Rural Electric 

Cooperative Association (APPA/NRECA) and Florida Municipal Power Agency together 

with Seminole Electric Cooperative, Inc. (FMPA/Seminole) raise one issue on rehearing 

of Order No. 667-B: whether PUHCA 2005’s accounting, record retention and reporting 

requirements should apply to a holding company system whose traditional utility 

operations are confined substantially to one state but that holds significant interests in 

out-of-state exempt wholesale generators (EWGs), foreign utility companies (FUCOs), 

and qualifying facilities (QFs). They assert that these requirements should apply because, 

they claim, regulators would not otherwise have access to relevant accounts and records 

and therefore would be unable to prevent inappropriate cross-subsidization or other 

misallocations of costs within the holding company system. We deny rehearing as 

discussed below. 

 3

 Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the 

Public Utility Holding Company Act of 2005, Order No. 667-A, 71 FR 28446 (May 16, 

2006), FERC Stats. & Regs. ¶ 31,213 (2006). 

4

 Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the 

Public Utility Holding Company Act of 2005, Order No. 667-B, 71 FR 42750 (July 28, 

2006), FERC Stats. & Regs. ¶ 31,224 (2006). 
Docket No. RM05-32-003 - 3 - 

Background

3. Under the Commission’s regulations under PUHCA 2005, a “single-state holding 

company system” is eligible for waiver of the Commission’s PUHCA 2005 accounting, 

record retention and reporting requirements.5

 In Order No. 667-A, the Commission 

defined “single-state holding company system” as a system that derives no more than 13 

percent of its “public-utility company” revenues from outside a single state.6

 In Order 

No. 667-B, the Commission clarified that revenues from EWGs, FUCOs or QFs do not 

constitute public-utility company revenues for purposes of determining status as a singlestate holding company system.7

 As a result, a single- state holding company system as 

defined in Order Nos. 667-A and 667-B may hold interests in EWGs, FUCOs and QFs 

without, by virtue of those interests, being subject to the Commission’s PUHCA 2005 

accounting, record retention and reporting requirements. 

4. The Commission reasoned that this approach follows the approach taken under 

section 3(a) of PUHCA 1935, which exempted a holding company from plenary 

oversight under PUHCA 1935 if the holding company’s traditional utility operations were 

largely confined to one state.8

 The exemption in section 3(a) reflected Congress’ 

 5

 18 CFR 366.3(c)(1). 

6

 Order No. 667-A, FERC Stats. & Regs. ¶ 31,213 at P 28. 

7

 Order No. 667-B, FERC Stats. & Regs. ¶ 31,224 at P 20. 

8

 15 U.S.C. 79c(a); see 15 U.S.C. 79z-5a and 79z-5b. 
Docket No. RM05-32-003 - 4 - 

assessment that other state and federal corporate and rate regulation was sufficient to 

protect against abuse in those circumstances. Further, the 13 percent standard adopted by 

the Commission in Order Nos. 667-A and B to determine who qualifies for the single 

state holding company waiver was the same standard applied by the SEC under PUHCA 

1935, thus resulting in no more onerous regulatory requirements than those in place under 

PUHCA 1935. In Order No. 667-B, the Commission found that other state and federal 

regulation continues to be sufficient to protect against abuse, without subjecting a holding 

company system to the Commission’s PUHCA 2005 accounting, record retention and 

reporting requirements due to the holding company system’s ownership of out-of-state 

EWGs, FUCOs and QFs.9

Requests for Rehearing

5. APPA/NRECA and FMPA/Seminole envision a holding company system whose 

traditional utility operations are confined to one state but that has EWGs, FUCOs and 

QFs in multiple jurisdictions. They assert that, if such a holding company system is not 

subject to the Commission’s PUHCA 2005 accounting, record retention and reporting 

requirements, regulators will have insufficient access to the holding company system’s 

accounts and records and therefore will be unable to protect against misallocations of 

costs and other potential abuses within the holding company system. 

 9

 Order No. 667-B, FERC Stats. & Regs. ¶ 31,224 at P 20-22. 
Docket No. RM05-32-003 - 5 - 

Decision

6. In adopting the SEC’s 13 percent of revenue standard (and exclusion of EWGs, 

FUCOs and QFs from consideration in the 13 percent of revenue calculation) for 

purposes of determining who qualifies for the single state holding company waiver of the 

Commission’s PUHCA 2005 accounting, record retention and reporting requirements, the 

Commission sought to be consistent with the general intent of Congress, in repealing 

PUHCA 1935, to remove unnecessary regulatory burdens and not to create new ones in 

PUHCA 2005. Furthermore, APPA/NRECA and FMPA/Seminole have presented no 

convincing argument that other state and federal regulation will be insufficient to protect 

against abuse in the circumstances envisioned by APPA/NRECA and FMPA/Seminole, 

without imposition of the Commission’s PUHCA 2005 accounting, record retention and 

reporting requirements. The Commission will still have full access under the FPA to the 

accounts and records of the traditional public utility within the holding company system 

(i.e., the utility with captive customers and traditional regulated rates) and of the holding 

company and any other company controlled by the holding company, insofar as they 

relate to transactions with or the business of the public utility.10 From those accounts and 

records, the Commission will be able to discern whether the public utility is attempting to 

 10 16 U.S.C. 824d-e, 825; Order No. 667, FERC Stats. & Regs. ¶ 31,197 at P 3-6; 

accord 15 U.S.C. 717c-d, 717g (identifying Commission authority with respect to natural 

gas companies). 
Docket No. RM05-32-003 - 6 - 

recover, from its captive customers, costs that are properly attributable to other 

businesses within the holding company system.

7. Moreover, with respect to state regulatory authority access to books and records of 

holding companies and their associate and affiliate companies, nothing in our waivers 

affects section 1265 of PUHCA 2005, which expressly provides for such access.11 We 

add that no state regulatory authority has suggested that it has insufficient authority in the 

circumstances envisioned.

8. For these reasons, we deny rehearing. 

The Commission orders: 

APPA/NRECA’s and FMPA/Seminole’s requests for rehearing are hereby denied. 

By the Commission. 

( S E A L ) 

 Magalie R. Salas, 

 Secretary. 

 

 

 11 42 U.S.C. 16453. The Federal Power Act, in particular section 201(g), 

16 U.S.C. 824(g), also grants state regulatory authorities certain access to books and 

records.