Electricity Supply

Regulation of the Changing Electric Industry Under the Public Utility Holding Company Act Gao ID: T-RCED-92-2 October 3, 1991

This testimony focuses on the Securities and Exchange Commission's (SEC) administration of the Public Utility Holding Company Act of 1935, intended to protect the public, investors, and consumers from abuses associated with the control of electric and gas utility companies through the holding company structure. These abuses include subjecting subsidiary utilities to excessive charges for services, construction work, and materials; frustrating effective state regulation through the holding company structure; and overloading subsidiary utilities with debt to prevent voluntary rate reductions. GAO discusses (1) industry changes during the past decade involving electric utility holding companies; (2) SEC's regulatory response to such changes; and (3) the relationship between SEC, the Federal Energy Regulatory Commission, and states in protecting consumer and investor interests in light of these changes.



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