On behalf of our members, we want to express our continuing appreciation for the leadership you and your colleagues are showing in seeking enactment of S. 1317, a bill to repeal the Public Utility Holding Company Act of 1935, while assuring appropriate consumer and investor protection. As you know, the '35 Act imposes duplicative, unnecessary, and burdensome requirements that are outdated and do not reflect current circumstances in the gas and electric utility industry. We have strong indications of an increasing bipartisan consensus (em in Congress and outside of it (em that repeal is timely now. The Securities and Exchange Commission (SEC) a year ago reached that conclusion; the National Association of Regulatory Utility Commissioners (NARUC) agreed that repeal, subject to conditions, is appropriate; and many trade groups have endorsed repeal. We certainly will be continuing our efforts in support of repeal and look forward to working with you in the process of hearings and markup on S. 1317.
We have seen the letter dated April 4, 1996, to you and other senators from certain special interest groups calling into question the timing of repeal. For several reasons, the letter reflects a lack of understanding of the utility industry.
First, it is hard to take seriously a letter that alleges "S. 1317 reduces the ability of states to exercise local regulatory control over complex utility corporate organizations." The repeal of PUHCA will assure, not reduce, local control by eliminating the so-called "Ohio Power Gap", which the Federal Energy Regulatory Commission (FERC) and state commissions recognize reduces their authority.