Ferd. C. Meyer

Senior V.P. & General Counsel

Central & South West Corp.

While I agree wholeheartedly with Mr. Hawes's conclusion that outright repeal of the 1935 Act (PUHCA) is needed, I disagree with his conclusion that the odds are currently against repeal.

The general enthusiasm for deregulation in Congress and the Administration (as noted by Mr. Hawes), and the compelling case for repeal, will, I believe, overcome arguments opposing repeal of a statute that is the embodiment of unnecessary and burdensome regulation. The 1935 Act is obsolete and unaffordable. Its continued existence, as Mr. Hawes notes, can no longer be justified. It impairs the financial health of the electric utility industry by imposing unnecessary costs, hinders the evolution of the industry, and frustrates new state and federal policies (em all to the detriment of the very same investors and consumers whom the 1935 Act was intended to protect.

The dramatic increase in competition in the electric utility industry, together with sharply lower growth rates, increased environmental safeguards, and the current emphasis on conservation, all require electric utilities to become providers of energy and energy-related services at the lowest possible cost. The 1935 Act stands in the way of efforts by registered holding company systems to adapt to these changes.

Thus, while Mr. Hawes likens the 1935 Act to "a second belt over two pairs of suspenders," a more apt analogy would be a ball and chain firmly affixed to the ankle of a track and field athlete straining to compete against other, unencumbered competitors. t

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