Russ Feingold: “In addition to consumers and small businesses, we have heard from a diverse array of financial companies and credit…”

“In addition to consumers and small businesses, we have heard from a diverse array of financial companies and credit agencies that are deeply concerned about this issue. From 2001-2003, financial ratings agencies issued over 180 bond downgrades--overwhelmingly as a result of poor performance by nonutility investments. All too often, utilities have succumbed to temptation and have relied on the more stable, regulated utilities within the company to shore up balance sheets and offset risky nonutility investments, while customers, ratepayers and investors pay the bill. We all agree that we cannot let Enron-style abuses we keep hearing about from consumers, small businesses, and financial companies continue. The Feingold-Brownback amendment adds a new section to the Federal Power Act to give FERC new power to regulate transactions between public utility companies and their affiliate and associate companies. The amendment also requires FERC to issue regulations that require affiliate, associate, and subsidiary companies to be independent, separate, and distinct entities from public utilities; maintain separate books and records; structure their governance in a manner that would prevent creditors from having recourse against the assets of public utilities; and prohibit cross-subsidizing, or shifting costs from affiliate, associate, or subsidiary companies to the public utilities.”