June 9, 2009 - Markey Requests Accounting on Effect of Holding Company Act Repeal on Transmission
Supporters Promised Repeal Would Unleash Transmission Growth
WASHINGTON (June 9, 2009) – Rep. Edward J. Markey (D-Mass.), Chair of the House Subcommittee on Energy and Environment, sent a letter to Chairman Jon Wellinghoff of the Federal Energy Regulatory Commission (FERC) requesting information regarding the impact of the repeal of the Public Utility Holding Company Act (PUHCA). Chairman Markey’s Subcommittee has oversight and legislative authority over FERC and the Federal Power Act.
PUHCA was enacted in 1935 to protect utility ratepayers and investors from injury due to risky business decisions and unsound financing structures. Lobbied heavily by utility companies, Congress repealed PUHCA in the 2005 Energy Policy Act. Supporters argued that the repeal would foster the creation of new transmission providers and transmission lines.
"I believed in 2005 and continue to believe today that the repeal of PUHCA was unwise," said Markey. "The repeal removed consumer and investor protections and created incentives for utilities to take increased risks and to create dubious financing structures at the expense of the average ratepayer and independent investor."
The Government Accountability Office (GAO) recently raised concerns about FERC's failure to improve its oversight of utility mergers and acquisitions following PUHCA's repeal. Citing the GAO report, Chairman Markey requested that FERC respond to a number of questions that will provide the Subcommittee with information that will allow it to analyze the costs and benefits of the repeal. The letter specifically questions the extent of private sector investments made by advocates of the repeal.
The letter to FERC regarding PUHCA's repeal is available here.
Last week, Chairman Markey sent an additional letter to Chairman Wellinghoff requesting an analysis of the effectiveness of higher incentive-based rates for investments in certain electric transmission projects.
The Energy and Commerce Subcommittee will hold an oversight hearing, "The Future of the Grid: Proposals for Reforming National Transmission Policy," to investigate these and other transmission issues on Friday, June 12 at 9:30 a.m. in 2123 Rayburn House Office Building.