Although the buzz on Capitol Hill is Senate debate over thePublic Utility Holding Company Act (PUHCA) is imminent, gasindustry observers question whether Congress can pass legislationthis year reforming the New Deal law.

“I think it’s a long shot because of the various opponents to astand-alone bill that are out there and the amount of time that’sremaining, particularly in the House. There are detractors to astand-alone bill in the Senate, and that’s pretty serious. But inthe House, it’s even more serious,” commented an industrylegislative expert. Both Thomas J. Bliley (R-VA), chairman of theCommerce Committee, and Rep. Dan Schaefer (R-CO), chairman of theCommerce subcommittee on energy and power, are vociferous opponentsof piecemeal legislation for PUHCA, as well as Rep. John Dingell(D-MI), Commerce’s ranking minority member, who continues to hold”a rather large amount of sway.”

Another legislative guru questioned whether Sen. Alfonse D’Amato(R-NY), author of the Senate PUHCA bill, had the drive needed tosee his bill through. “D’Amato’s got to have a lot of fire in thebelly to take on this issue. I haven’t seen this” from the senator,who faces a tough re-election this year. “Things need to gel alittle bit more before this thing [PUHCA] rolls. Clearly, it’s gota lot of momentum. But there needs to be more lobbying to bringsome Republicans…over.”

At the end of last week, Senate Majority Leader Trent Lott’sstaff reported the Mississippi Republican and Sen. Dale Bumpers(D-AR) had not reached any agreement on when debate on PUHCA wouldbegin and on the number of amendments to be offered. Lott considersPUHCA legislation a “priority,” yet he doesn’t think the Senatewill have time to do “broad reform” of the electricity industrythis year, a Lott staffer said. Some believe the debate over PUHCAcould begin as early as late March-early April, while othersbelieve late April is more likely.

Bumpers wants to offer PUHCA amendments that would deal with the”bigger picture” of electricity restructuring, said the legislativeexpert. “There are some senators who want to broaden the scope” ofPUHCA reform, and Bumpers, who is a foe of piecemeal PUHCAlegislation, is one of them. “His point is if it’s going to move,why not just expand it so it isn’t a stand-alone bill anymore.”Sens. Slade Gorton (R-WA) and Craig Thomas (R-WY), who also areopponents of a stand-alone PUHCA bill, are expected to proposeamendments.

The PUHCA bill, as it currently stands, would eliminate theSecurities and Exchange Commission reporting requirements formultiple-state holding companies and would allow utilities withinthe holding company structure to get into businesses that areoutside their core operations – generation, transmission anddistribution. The bill, however, would give state regulators theability to review the books and records of holding-companyutilities within their states. It also would give FERC more reviewauthority.

The natural gas industry is interested in PUHCA reform because”simply the fact that PUHCA is out there means that a lot oftransactions – business mergers, acquisitions and joint ventures -that might take place don’t take place since …the resultingentity might have to register under PUHCA.” Also, three gascompanies – Columbia Gas System, Consolidated Natural Gas andNational Fuel – are registered under PUHCA.

In other action, House Majority Leader Richard Armey (R-TX) hasplaced legislation to broadly reform the electricity industry onthe 90-day calendar for floor action in the House. “It won’t beeasy. I think chairmen Bliley and Schaefer are going to make apush” to meet the deadline, the legislative expert noted, but “Ithink it’s a long shot at this point” to expect the House to have abill ready for debate in 90 days.

“I think a lot of members of Congress just aren’t there yet.They’re not terribly comfortable with having to make a lot ofcommitments on this issue now. There’s still a lot of work to do,”he told NGI. He doubts any legislation broadly reforming theelectricity industry will emerge from Congress this year. “It’sjust too complicated, both politically and economically.”

Susan Parker

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