SEC revisions to provide new gas industry opportunities

✍ Scribed by Rutkowski, Joanne C.

• Publisher: John Wiley and Sons
• Year: 2007
• Weight: 717 KB
• Volume: 14
• Category: Article
• ISSN: 0743-5665
• DOI: 10.1002/gas.3410140705

✦ Synopsis

any regulators regularly produce dazzling M or, depending on your point of view, devastating initiatives for the restructuring of the utility industry. However, the Securities and Exchange Commission continues to plod along, reluctantly administering the Public Utility Holding Company Act of 1935. Like the tortoise in Aesop's fable, however, the SEC generally makes it to the finish line on time. Indeed, as the SEC's critics are quick to point out, no utility deal in the past ten years has failed for want of 1935 Act approval.

Recent SEC decisions have opened the door for industry participants to consider an even broader array of merger partners and energy services. This article focuses on the implications of the 1935 Act for national, and even international, energy services companies with respect to three emerging trends: noncontiguous gas acquisitions, convergence transactions, and foreign investment in U.S. utilities.

Repeal of 1935 Act Likely

The 1935 Act is New Deal legislation that was intended to address concerns in the first part of this century that utility holding companies were, on the whole, out of control. Regulation thereunder is both pervasive and farreaching. Status as a holding company generally attaches to any company that "owns, controls, or holds with power to vote," 10 percent or more of the voting securities of a public utility company, that is, a gas or electric utility company.

Of interest here, while the generation, transmission, and distribution of electricity are utility