Under PUHCA, any companies that seek to become owners of public utilities have to divest themselves of their non-utility holdings. PUHCA rules were designed to make it very, very difficult for energy holding companies to get involved in risky businesses. As a result, not one PUHCA-regulated utility holding company has gone bankrupt since 1935.You know, this really makes me want to blog about how many oilmen we have/had in high places and how much it is screwing all of us to not go after sources of terrorist funding because they also happen to be sources of big oil's windfall profits. I think that's going to be a future blog post, as it obviously pisses me off too much to rationally think about right now.
The section of the 2005 Energy Policy Act repealing PUHCA is a tiny, almost invisible portion of the massive document. But as a result of the simple line ("The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.) is repealed."), there are now no restrictions on who can buy public utilities. Holding companies will no longer be required to divest non-utility businesses; geographic limitations or restrictions on number of holdings are similarly gone. Even the SEC has been taken out of the process, replaced by a much-scaled-down review by the Federal Energy Regulations Commission (FERC).
In short, the repeal of PUHCA means that public utility companies are now fair game for buyouts and consolidation. One likely scenario is that we see a process of merger and acquisition in the energy utility market akin to that in the telecommunications arena. Moreover, as major global energy companies such as ExxonMobil and ChevronTexaco have been at the forefront of efforts to get PUHCA repealed, it's highly likely that they -- along with other energy majors -- will look to spend some of their recent windfall profits on utility acquisition, buying not just the power supply businesses, but the customer information. But it need not be an oil firm buying up utilities; billionaire investors and non-energy industry companies could just as easily buy up local utilities.