How we got here

It’s a century long knock-down-drag-out battle between the needs of the public and an unyielding drive for corporate profits and control. Over time, winners and losers have continued to change but the battle to protect small businesses and consumers has never ended.

Regulated utility companies create holding companies to allow them to enter new unregulated industries. Leveraging utility ratepayer assets, electric utilities buy most of the electric streetcar companies operating at the time and dominate the market.  This allows them to realize profits from the unregulated business throughout the depression.


The National Electric Light Association organizes one of the largest public relations and lobbying campaign in history with two goals.

  1. Generate public fear and distrust against public ownership of utilities and
  2. Promote the creation of multi-tiered utility holding companies allowing regulated utilities to expand into unregulated businesses.

US Senate begins a 7-year investigation into large scale corruption and abuses of utility holding companies. These multi-leveled corporate structures were nearly impossible for states to track or regulate.


Wall Street Crashes


The Federal Trade Commission calls for the elimination of “evil practices and conditions” in the utility industry and documents the massive “propaganda” campaign waged by the utilities.


Congress faces a massive lobbying campaign against placing restrictions on utilities including millions of letters and hundreds of thousands of telegrams. 

Senator Hugo Black and the Black Committee uncovers a $5 Million ($93 million in today’s dollars) lobbying campaign to prevent utility regulation including more that 250,000 fake telegrams falsely claiming to be from real citizens and a massive coverup as well as claims that the utilities wiretapped Senators phones, bribery and tax evasion.

February 1935

The Public Utility Holding Company Act (Wheeler Rayburn Act) passed into law breaking up electric utility holding companies, limiting operations to a single state putting them under state regulation and stopping regulated utilities from engaging in unregulated businesses. August 26, 1935, President Franklin D. Roosevelt signed the bill into law.

August 1935

December: 45 lawsuits brought by over 100 utility companies attempting to prevent the PUHCA from being enacted end at the US Supreme Court and the Act is fully implemented and enforced.

December 1938

For the next 54 years, utilities are restricted by federal law from entering into unregulated markets, creating pyramid corporate structures and cross-subsidizing non-utility businesses.

The SEC and electric utilities begin push for repeal of PUHCA.


The Energy Policy Act of 1992 partially repeals PUHCA and allows for independent power generators to create utility holding companies again. This leads to the bankruptcies of several utilities including Mirant Energy, Montana Power Company, and Westar Energy who made bad deals moving into unregulated subsidiaries.


21 states pass restructuring statutes requiring electric utilities to provide customers access to alternative energy sources. To make up for lost profits, many utilities start transferring assets to holding companies and organize operations into separate regulated and unregulated wholly owned subsidiaries in a strategy called “self-dealing.”


Energy Policy Act of 2005 passed both houses of Congress and was signed into law by President George W. Bush, fully repealing PUHCA.


State commissions and legislatures act to fill the regulatory gaps created by the repeal of the PUHCA including California, Kansas, Maryland, Arkansas, New Jersey, Texas and many others.


Despite massive political spending and lobbying, most states have found a way to enact and enforce regulations to protect citizens from monopoly utility expansions.  Florida has yet to do so.
Florida’s Failure to Regulate, MEP Coalition Report 2019

A century long battle but the facts have not changed.

The use of holding companies to allow utility monopolies to acquire or set up new businesses in other unregulated industries has been debated since the 1920’s. Referred to as “self-dealing” and “pyramiding”, there has been an unending battle between the need to provide stable and efficient power infrastructure and protect ratepayers from the relentless drive for utility profits.

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