Frontlines

It's a law that only a mother could love.

It's tough to write another word about repealing the Public Utility Holding Company Act (PUHCA), or the "35 Act," as it is also known, referring to its Depression-era origins. But like the Energizer bunny, this debate keeps on going and going.

It's almost 70 years later, and the issue has outlived several generations of utility executives, regulators, lawyers, bankers, academics, and a few magazine editors. Heck, it may outlive us all.

As far back as 1931-in our issue of Feb. 19-you can see the playing host to James C. Bonbright, the famed professor from Columbia University, as he sparred with the now-infamous president of Middle West Utilities Cos., Sam Insull, on the subject of holding companies in the utility industry.

But it's time that this long, storied debate comes to an end, as Congress in the coming weeks prepares to introduce PUHCA repeal as part of a national energy bill. Many of the old problems that PUHCA was designed to fix are no longer relevant today. And when supporters counter that PUHCA ought to survive into the 21st century, they fail to account for 20th century improvements in regulation that are already on the books.

Last fall, sources told me that a majority in Congress wanted PUHCA repeal, and disagreed only on how much added authority to give to FERC to regulate mergers as a . Those senators who opposed PUHCA repeal argued that PUHCA would have prevented the Enron collapse.

Yet the Securities and Exchange Commission (SEC) flatly has refuted this last-ditch assertion aimed at saving PUHCA. Sources at the SEC have advised me that the agency supported PUHCA repeal wholeheartedly: