The Senate banking committee has approved legislation to repeal the New Deal-era Public Utility Holding Company Act and shift oversight of utility companies from the Securities and Exchange Commission to the Federal Energy Regulatory Commission and state public service commissions. The panel's vote on April 24 was 19-1.

Sen. Richard Shelby (R-Ala.), the bill's sponsor, says, "Unnecessary regulations are preventing billions of dollars from being invested in critical energy projects throughout the united States."

Banking panel Chairman Phil Gramm (R-Texas) says the 1935 statute "is antiquated and redundant." He also contends that the law "impedes the functioning of a competitive market. I think it hurts ratepayers. I think it hurts investors."

The 66-year-old law gave the SEC substantial regulatory power, including responsibility for all utility financial transactions, such as mergers, diversifications, loans and transactions within a holding company. It also prohibited utilities from making loans to their parent companies. In addition, the act restricts holding companies to single and integrated public utility systems and businesses that are "reasonably incidental or economically necessary or appropriate" to their operations.