Senate panel OKs energy policy bill

The Senate energy committee, by a wide majority, passed an energy bill Thursday that would repeal a depression-era antitrust law and authorize a survey of offshore oil and natural gas reserves.

The legislation would repeal the 1935 Public Utility Holding Company Act, which restricts utility acquisitions. The Senate Energy and Natural Resources Committee added a provision repealing the law, known as Puhca, after including measures to enhance the Federal Energy Regulatory Commission's authority to review mergers.

Differences in the bills over Puhca repeal, federal authority for citing liquefied natural gas terminals and revenue-sharing for states that allow offshore oil and gas production are expected to be debated by the full Senate next month.

If adopted in the Senate, the measure must be reconciled with an energy bill passed by the House in April before the legislation can be signed into law by President Bush.

"I thought it was too broad," committee Chairman Pete Domenici, told reporters of the Puhca provision after the vote. "We've been urged by a number of the utility companies to pass this bill with this Puhca language in it, not because they like it but because they want the bill passed."

Domenici, a Republican from New Mexico, said he worked to include Democrats in the bill-drafting process. The measure was voted out of the committee with support from nine of 10 Democrats by a 21-1 vote. Ron Wyden of Oregon cast the only negative vote.

Along with Puhca repeal, the committee approved an amendment that would authorize the federal government to determine how much oil and natural gas there is in U.S. offshore tracts.

Getting rid of the 1935 law may make it easier to complete utility acquisitions announced this month by Warren Buffett's MidAmerican Energy Holdings Co. and by Duke Energy Corp., and it may spur additional combinations. MidAmerican announced this week it will acquire PacifiCorp, the electricity utility that operates as Utah Power in Utah and Idaho.

Buffett, chief executive of Berkshire Hathaway Inc., which owns more than 80 percent of MidAmerican, has been among those lobbying for repeal of the act. He said it keeps capital out of an industry that needs more investment. The act requires that merged utilities have interconnected networks, and it limits participation of non-utility companies in the industry.