||Home | Volunteer | Donate | Subscribe | FTCR Websites | Books | Site Map|
home / utilities / press releases
Aug 21, 2003
CONTACT: Doug Heller - 310-392-0522 x309
More Deregulation At Heart of Federal Energy Bill
Repeal of FDR-era Consumer Protection Would Lead to More Disasters, Higher Electricity RatesA provision of the federal energy legislation that a congressional conference committee will consider next month would dramatically reduce the regulatory oversight of the nation's largest energy firms. The section, which has received scant attention as lawmakers and environmental groups focus on issues of oil drilling, proposes to repeal the 1935 Public Utility Holding Companies Act, or PUHCA, which restrains and regulates utility companies. The deregulation of state energy systems and federal decisions to loosen regulatory control of electricity in recent years exacerbated severe strains on the Northeast power system, according to the Foundation for Taxpayer and Consumer Rights (FTCR), a California-based nonprofit organization.
In a letter sent to President Bush on Monday, FTCR called for an end to all legislative and regulatory proposals to further deregulate the nation's energy system in the wake of the blackouts. The group also urged the President to specifically investigate the connection between deregulation and the outages.
"Despite the recent blackouts and the memory of the California energy crisis, politicians are quietly planning to further deregulate the nation's energy system," said FTCR's senior consumer advocate Douglas Heller. "In the rush to address the flaws in our energy system, President Bush and lawmakers must not ignore the devastating role of deregulation and the failure of the market to keep the lights on and prices reasonable."
Danger of PUHCA Repeal
Contained in Section 223 of the proposed energy bill, HR 6, is the repeal of the Public Utilities Holding Company Act of 1935 (PUHCA). According to consumer advocates, this is the energy industry's holy grail. The repeal of PUCHA would:
A series of rule changes and exemptions to PUHCA during the 1990s have already had detrimental outcomes, according to FTCR. After gaining an exemption from PUHCA in 1994, Enron was able to dominate power markets virtually unchecked. FTCR also noted that FirstEnergy, the utility, which has received much of the initial blame for the blackouts has been involved in a series of workplace and public safety disasters as it has expanded into a consolidated utility holding company operating in multiple deregulated markets.
"Clearly we need more energy regulation not less. For years the energy industry has pushing unsuccessfully for the complete repeal of PUHCA and it hopes that, with lawmakers distracted by other aspects of the energy proposal, this dramatic deregulation of the power industry will slip by largely undetected," said Heller.
back to top
©2000-2004 FTCR. All Rights Reserved. Read our