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The widest-ranging energy bill in the U.S. in decades cleared its final hurdle Friday, opening the door to increased investment and consolidation in the energy industry. The Senate approved the $12.3 billion Energy Policy Act of 2005 in a 74-26 vote, ending a congressional stalemate that has lasted nearly five years. The White House said in advance of passage that President Bush looked forward to signing the bill into law, possibly by the first week in August. Under public pressure to chart an energy strategy amid soaring oil and natural gas prices, Bush challenged Congress to provide him with a bill before lawmakers depart for the long August recess. But even the bill’s sponsors conceded that their massive measure will have little if any impact on today’s energy prices or wean the nation away from its love affair with the automobile. “We won’t have any answers if the question is what are you going to do tomorrow morning about gasoline prices,” said Sen. Pete Domenici, R-N.M., who led the Senate negotiations with the House in crafting the legislation. The measure, among other things, repeals the Public Utility Holding Company Act of 1935. PUHCA, as the law is known, put geographic limitations on mergers in the sector and also thwarted investment by nonenergy companies. Now, those restrictions will fall away. “PUHCA’s repeal improves the universe of entities that can invest in electric utilities and improves their access to capital,” said Adam Wenner, a partner in the project finance group at law firm Chadbourne & Parke in Washington. Wenner added that companies who previously would not have pursued a merger or acquisition in the industry because of PUHCA will now compete more readily. Consumer advocates, however, worry that the law’s demise will spark a wave of takeovers of “cash cow” utilities by investment companies that have little or no interest in ratepayers and that will try to increase profits at the utilities by any means possible. Democrats tried to mitigate those concerns by giving the Federal Energy Regulatory Commission increased merger review authority over electric and gas utilities to offset the loss of PUHCA’s protections. Copyright �2005 TDD, LLC. All rights reserved.

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