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HomeMy WebLinkAboutAgenda Report - November 5, 1997 (70)CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: Council Statement of Opposition to U.S. Senate Bill 621 - Repeal of the Public Utility Holding Company (PUHCA) MEETING DATE: November 5, 1997 SUBMITTED BY: Electric Utility Director RECOMMENDED ACTION: That the City Council approve the Mayor's signing of the attached letter requesting that the Public Utility Holding Company Act not be repealed until comprehensive legislation to restructure the electric utility industry is in place. BACKGROUND: The Public Utility Holding Company Act was passed in the 1920's to prevent domination of the electric energy industry by the concentration of market power through the formation of holding companies. Legislation to repeal PUHCA is now being considered by Congress (S.621) in advance of comprehensive legislation to restructure the electric utility industry containing adequate safeguards designed to assure competition in the marketplace. While repeal of PUHCA will eventually occur, its repeal at this time represents a piecemeal approach to the larger issue of national electric utility industry restructuring and a hindrance to the restructuring process itself. FUNDING: None Required. Alan N. Vallow Electric Utility Director Prepared by Jack Stone, Manager Business Planning & Marketing ANV/JS/Ist cc: City Attorney Approved October 27, 1997 CITY COUNCIL PHILLIP A. PENNINO, Mayor JACK SIEGLOCK Mayor Pro Tempore KEITH LAND STEPHEN J. MANN DAVID P. WARNER Honorable Senator Feinstein 331 Hart Building Washington, DC 20510 Dear Senator Feinstein: CITY OF LODI ELECTRIC UTILITY DEPARTMENT ALAN N. VALLOW, DIRECTOR 1331 S HAM LANE LODI, CALIFORNIA 95242-3995 (209)333-6762 FAX (209) 339-0851 November 5, 1997 H. DIXON FLYNN City Manager RANDALL A. HAYS City Attorney ALICE M. REIMCHE City Clerk It is our understanding that the U.S. Senate may soon consider S_ 621, Senator D'Amato's legislation to "reform" the Public Utility Holding Company Act (PUHCA). We urge you to oppose consideration of this legislation outside the context of broader legislation restructuring the electric utility industry. The City of Lodi believes that stand-alone repeal of PUHCA would: • Enable out-of-state utilities to unfairly compete in California's competitive retail market by cross -subsidizing their sales with excessive rates collected from consumers in their home states that are not similarly provided with retail choice; • Lead to further consolidation in the electric industry, rather than addressing the market power concerns that parties to AB 1890 expected Congress to resolve; • Frustrate development of a robust competitive market by decreasing the likelihood that utilities in other states will constructively particip ate in state and federal efforts to introduce retail competition; and • Hinder effective state regulation of remaining monopoly services (such as distribution) by facilitating formation of multi -state c orporations that are outside the reach of any one state commission. For these reasons, we urge you to vote against cloture when S. 621 is brought to the floor for consider ation. Sincerely, Jack Sieglock Mayor Pro Tempore CITY COUNCIL PHILLIP A. PENNINO, Mayor JACK SIEGLOCK Mayor Pro Tempore KEITH LAND STEPHEN J. MANN DAVID P. WARNER Honorable Senator Boxer 112 Hart Building Washington, DC 20510 Dear Senator Boxer: CITY OF LODI ELECTRIC UTILITY DEPARTMENT ALAN N. VALLOW, DIRECTOR 1331 S HAM LANE LODI, CALIFORNIA 95242-3995 (209)333-6762 FAX (209) 339-0851 November 5, 1997 H. DIXON FLYNN City Manager RANDALL A. HAYS City Attorney ALICE M. REIMCHE City Clerk It is our understanding that the U.S. Senate may soon consider S. 621, Senator D'Amato's legislation to "reform" the Public Utility Holding Company Act (PUHCA). We urge you to oppose consideration of this legislation outside the context of broader legislation restructuring the electric utility industry. The City of Lodi believes that stand-alone repeal of PUHCA would: • Enable out-of-state utilities to unfairly compete in California's competitive retail market by cross -subsidizing their sales with excessive rates collected from consumers in their home states that are not similarly provided with retail choice; • Lead to further consolidation in the electric industry, rather than addressing the market power concerns that parties to AB 1890 expected Congress to resolve; • Frustrate development of a robust competitive market by decreasing the likelihood that utilities in other states will constructively particip ate in state and federal efforts to introduce retail competition; and • Hinder effective state regulation of remaining monopoly services (such as distribution) by facilitating formation of multi-statec orporations that are outside the reach of any one state commission. For these reasons, we urge you to vote against cloture when S. 621 is brought to the floor for consider ation. Sincerely, Jack Sieglock Mayor Pro Tempore