BC: MORE UTILITY MERGERS COMING
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US FERC issues new utility merger rules
Thu Dec 8, 2005 07:25 PM ET
By Chris Baltimore
WASHINGTON, Dec 8 (Reuters) - The Federal Energy Regulatory Commission (FERC) on Thursday finalized rules to replace a defunct Depression-era law that had limited U.S. utility mergers, which Congress repealed earlier this year.
The Public Utility Holding Company Act of 1935, or PUHCA, was repealed as part of a broad multibillion-dollar energy bill signed into law last summer by President George W. Bush.
The law required FERC to issue new rules by Thursday, and for them to take effect on Feb. 8, 2006.
U.S. utilities long complained that PUHCA restrained mergers and power grid investments, while consumer groups said the law was needed to ensure fair competition in the electricity market.
"These regulatory reforms will open the electricity and natural gas sectors to new sources of investment in necessary energy infrastructure development," FERC Chairman Joseph Kelliher said in a statement.
Under PUHCA, interstate utilities have been regulated by the Securities and Exchange Commission, which has oversight over the companies' mergers, financial structures, and other operations. The act had barred non-utility companies, like oil companies or investment banks, from buying utilities.
The new energy law replaced the SEC-administered regime with a program that gives federal and state regulators more access to utility books and records, FERC said. It exempted rural electric cooperatives, single-state holding companies and holding companies that own 100 megawatts or less of generation from the new rules.
The Edison Electric Institute, which represents most U.S. utilities, said it supports most of the rule changes but sees some of the record-retention requirements as onerous.
Three big utility mergers have been announced in recent months -- Exelon Corp's (EXC.N:) purchase of Public Service Enterprise Group (PEG.N:) , Duke Energy Corp.'s (DUK.N:) acquisition of Cinergy Corp. (CIN.N:) and the takeover of PacifiCorp by a unit of Warren Buffett's Berkshire Hathaway (BRKa.N:) .
FERC has already approved the $15 billion Exelon-PSEG link a deal creating the biggest U.S. utility. Commissioners could act on the proposed $9 billion Duke-Cinergy merger at a meeting next week.
FERC also said it will hold a conference in one year to assess whether any additional merger rules are needed.
Just announced today FPL for CEG
I'm hoping that this legislation will open the way for
big oil and big gas to realize that they are in the
ENERGY business and divert some of their cash flows
to the build out of new nuclear .. which IMHO has to happen
to avoid/mitigate a post Peak Oil hard landing ..
As such I've been holding these owners of nuclear
power plants .. CEG/D/EXC/FE ..
Swapping CEG for FPL on this morning's announcement
and will add DUK at some point .. |
