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Congress flips a big switch

Scrutiny needed as electric firms can now easily merge

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Get ready to start reading the fine print on your electric bill. And especially keep track of who owns the utility. Starting this week, the nation's roughly 220 investor-owned electric utilities can be more easily bought and sold, like properties in a game of Monopoly.

Congress last week repealed the venerable but little known Public Utility Holding Company Act, a Depression-era safeguard designed to prevent market manipulation by supersized electric utility companies. Once a keystone of the New Deal, the 1935 law was thrown onto the ash-heap of history as just one of many measures in a comprehensive energy bill soon to be signed by President Bush.

Known as PUHCA (or "pooh-ka"), the act was once seen as critical to keeping moguls from creating complex holding companies that could funnel the safe, steady cash flow of utilities into more speculative and rewarding - or dubious and financially disastrous - ventures, as actually happened during the 1920s.

And it did that, effectively preventing megamergers and creation of gargantuan monopolies spanning geographic regions. PUCHA also made it next to impossible for non-energy companies - whether purveyors of hamburgers or Hummers - to purchase a utility.

But Capitol Hill legislators decided last week that PUCHA was an antique, a stumbling block for a nation that's been pushing to find more efficiencies and cost savings in many regulated industries, from airlines to phone companies.

New pickings for the rich

Warren Buffet, that investor of all investors, and one of the world's richest men, is one of those reported to see the utility industry as ripe for picking. Even while PUHCA was in force, a division of his Berkshire Hathaway empire was hot in pursuit of PacifiCorp, an Oregon-based utility.

Perhaps PUHCA really was the dinosaur that Wall Street, the utility industry, and their lobbyists claimed. In that case, perhaps more genuine competition, lower electric rates, and better service - the mantra constantly promised by limited deregulation - will emerge to salve those who endured the great Northeast blackout of 2003 and the California electricity supply mess of 2000-01.

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