What is the purpose of the Public Utility Holding Company Act of 1935 (PUHCA)?

The Public Utility Holding Company Act of 1935 (PUHCA) was passed by the United States Congress to regulate utility holding companies who had control over multiple public utilities in the United States. The primary purpose of PUHCA was to restrict the power of large utility holding companies to prevent them from monopolizing the industry, or otherwise engaging in anti-competitive practices. Under PUHCA, a utility holding company was defined as one that owned or controlled 10 or more public utilities operating in interstate commerce. It created the Securities and Exchange Commission (SEC) which was responsible for regulating these companies. The SEC was given authority to require companies to obtain certificates of convenience and necessity which allowed them to operate in certain areas. In addition to limiting the power of utility holding companies, the act sought to protect consumers by requiring full disclosure of the financial interests of the companies and the risks associated with their operations. It also established a code of conduct for utility holding companies, specifying that unfair or deceptive practices were prohibited. Finally, the act established a rate-making system which sought to set prices for services that were fair, reasonable, and in the public interest. Overall, the primary purpose of the Public Utility Holding Company Act of 1935 (PUHCA) was to ensure that public utility holding companies did not obtain too much power that would result in higher prices and fewer service options for consumers. The act also established a system of rate-making to ensure the public was not being over-charged for the services they were receiving.

What is the purpose of the Public Utility Holding Company Act of 1935 (PUHCA)?

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