Sec Trims Regulations For Utilities Changes Won’t Affect Wwp, Or Merger With Sierra Pacific

The Securities and Exchange Commission on Tuesday agreed to sharply cut its regulations for multi-state utility holding companies while retaining consumer protections.

The SEC rule changes, coupled with additional proposals to reduce regulations on the utility holding companies, could cut by two-thirds the paperwork the utility companies have to file with the SEC.

By reducing its role, the SEC effectively is transferring major consumer protection provisions of the Public Utility Holding Company to the Federal Energy Regulatory Commission, said William C. Weeden, an SEC official who oversaw the rule changes.

“The savings to the holding companies could be substantial, perhaps in the hundreds of millions of dollars,” Weeden said. The SEC now intends to focus its resources on auditing the utility companies.

The rules affect about a dozen utility companies that operate in several states, such as Entergy Corp., parent of utilities in Texas, Louisiana, Mississippi, and Arkansas. While few in number, these multi-state utilities control about 30 percent of the market.

Most utilities operate only in a single state, and are regulated by corresponding state regulators.

Although the Washington Water Power Co. operates in several states, it is not a holding company, spokesman Jay Hopkins said.

The rule changes will not affect the Spokane utility, nor its proposed merger with Sierra Pacific Resources, he said.

The SEC began regulating public utility holding companies following Depression-era management abuses that “left a trail and fraud, bankruptcy and ruin,” said SEC Chairman Arthur Levitt Jr.

Stringent regulations of such companies has become less necessary as the industry evolved, he said. Such rules now pose “an obstacle to rapid industry innovation,” Levitt said.

WWP was once a part of a holding company, American Power & Light, that also included Puget Sound Power & Light Co., Montana Power Co., and Idaho Power Co. American was broken up in the 1940s.

The utility industry is undergoing major changes now as proposals surface in California and elsewhere to permit customers new choices in selecting companies to provide electricity to their homes.

The rule changes, which come after a yearlong study, mean that the SEC will stop reviewing the issue of new utility bonds if state regulators have already approved the bonds.

The SEC acted to reduce the regulations by using its administrative authority, but there is a chance Congress could step in and enact further reforms to the utility law.

, DataTimes