N.J. BPU enacts new rules to insulate utilities from holding companies.
Jeanne Fox is president of the New Jersey Board of Public Utilities. The author acknowledges N.J. BPU staff members John Garvey and Andrea Sarmentero-Garzon for contributions to this article.
The Public Utility Holding Company Act of 1935 (PUHCA 1935) is long gone, having been repealed in February 2006 by the Energy Policy Act of 2005 (EPAct). In its stead, the Public Utility Holding Company Act of 2005 (PUHCA 2005) was enacted, an officially-coined “books and records” statute with few tools afforded states in their efforts to regulate utility holding companies. Although PUHCA 2005 is a weak substitute for its elder namesake, PUHCA 1935 had its own limitations. In many ways, it was a relic of the days when the federal government had limited regulatory jurisdiction over areas such as financial disclosure and securities issuances, state governments had insufficient legal authority and resources to regulate complex utility holding companies, and information gatekeepers such as credit-rating agencies were less sophisticated participants in what is now their routine role of acting as early warning systems for state utility regulators.