**GAO-08-289**                      Published: Feb 25, 2008. Publicly Released: Mar 06, 2008.                  

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## Highlights

Under the Public Utility Holding Company Act of 1935 (PUHCA 1935) and other laws, federal agencies and state commissions have traditionally regulated utilities to protect consumers from supply disruptions and unfair pricing. The Energy Policy Act of 2005 (EPAct) repealed PUHCA 1935, removing some limitations on the companies that could merge with or invest in utilities, leaving the Federal Energy Regulatory Commission (FERC), which already regulated utilities, with primary federal responsibility for regulating them. Because of the potential for new mergers or acquisitions between utilities and companies previously restricted from investing in utilities, there has been considerable interest in whether cross-subsidization--unfairly passing on to consumers the cost of transactions between utility companies and their "affiliates"--could occur. GAO was asked to (1) examine the extent to which FERC changed its merger and acquisition and post merger review and oversight processes since EPAct to protect against cross-subsidization and (2) survey state utility commissions about their oversight.

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## Topics

Auditing and Financial Management

Audit oversightAuditing standardsCorporate auditsCorporate mergersElectric energyElectric utilitiesFederal lawFederal regulationsIndependent regulatory commissionsInternal controlsNatural gasPublic utilitiesReporting requirementsUtility rates