Blackout, Partial PUHCA repeal & EWG's

http://www.citizen.org/cmep/energy_enviro_nuclear/electricity/deregulation/puhca/articles.cfm?ID=4257

The repeal of PUHCA is a center piece of the Energy Bill. PUHCA bans political contributions from registered and non-Exempt Holding Companies. This means Bush took unlawful contributions from Enron. Since SEC administers it, it is safe to say that he committed approx. ten times the securities fraud of Martha Stewart.

PUHCA also bans officers and directors of PUHC's from exercising options while they are on board. This means that Ken Lay is liable to any shareholder of Enron for the value of the stock used to exercise the options.

But best of all, PUHCA limits the number of layers of subsidiaries. This means Fastow is a federal offender.

The funny thing is that no one in their right mind would have a problem with what PUHCA can do yet it isn't enforced.

PUHCA was partially repealed to allow exemptions for generation assets now called "Exempt Wholesale Generators". This is what created the Merchant Sector of the energy business. The problem is that instead of generating power with these assets, Merchant subsidiaries were allowed to swap long term agreements tied to the assets for lower cost merchant agremeents. Instead of a plant that runs 24X7, they now could declare one a "peaker" and then shut it down.

There is no question that there was too much power on that line. The reason is because plants on either side didn't peak.

We don't need to repeal PUHCA further, we need to repeal that part which was repealed. We being shareholders. We being ratepayers. We being commodities traders. We being retirement savers. You name it. We need it.

There just isn't that much material you can refer to on PUHCA. If you have a more conservative web page that discusses it then please refer me to it.

Furthermore, I haven't found many people who even now that PUHCA bans Enron contributions and Lay's options profits. In fact, I spoke several times with California Board of Regents and Milberg Weiss people about the options being recoverable BY LAW. You don't have to demonstrate any malfeasance just that he exercised options while on board. Did they know about this? No. Did they do it before the statute of limits ran out. No.

Now you know. I hope you are as mystified as me. I can;t imagine what logic drives anyone to think that because of the Blackouts we have to repeal PUHCA. That is exactly what Bush said.

Want a good laugh? Read what Commissioner Hunt has to say about PUHCA. He thinks it needs to go because it is "redundant". I thought Bush was in favor of more redundancy in the power industry???? Worse yet, he lauds the fact that Enron and the like are now in Telecom and the EWG business.

"Since the [1995] report was published, the utility industry in the United States has continued to undergo rapid change. Congress has facilitated many of these changes. For example, as a result of various amendments to the Act, any company, including registered and exempt holding companies, is now free to own exempt wholesale generators and foreign utilities and to engage in a wide range of telecommunications activities...Currently, however, I am aware of nothing with regard to Enron that would change our opinion on PUHCA repeal...Indeed, Oregon's experience with Enron as an exempt company, at least anecdotally, confirms this — the Chairman of the Oregon Public Utility Commission recently testified that Oregon ratepayers were not harmed by Enron's collapse and that "`this utility [Portland General] is able to function just as well as it did before.'
"

Then he turns around and says :

"Because repeal of PUHCA would eliminate existing restrictions on both the size of utility holding companies and their ability to engage in non-utility activities, this risk may be magnified if holding company systems become bigger and more complex. Thus, so long as electric and gas utilities continue to function as monopolies, the need to protect against this type of cross-subsidization will remain."

I am here to tell you that FERC put out an order retricting cross contamination of unregulated debt not two weeks before El Paso Corp pawned all of its regulated assets (for only $3B) so it could post enough collateral in its various derivative margin accounts. And what did the executive director of FERC do? Nothing. Why? he says its all being handled privately.

Who needs PUHCA repeal when the guys adiminstering are so against enforcing it they will even meet in private with offenders and contradict themselves in front of congress?

http://www.sec.gov/news/testimony/021302tsich.htm#P32_4170

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.