Under the Public Utility Holding Company Act of 1935, the Commission regulates interstate public-utility holdingcompany systems engaged in the electric utility business and/or retail distribution of gas. The Commission's jurisdiction also covers natural gas pipeline companies and other non-utility companies which are subsidiary companies of registered holding companies. There are three principal areas of regulation under the Act: (1) physical integration of public-utility companies and functionally related properties of holding-company systems, and simplification of intercorporate relationships and financial structures of such systems; (2) financing operations of registered hold

ing companies and their subsidiary companies, acquisition and disposition of securities and properties, as well as certain accounting practices, servicing arrangements, and intercompany transactions; (3) exemptive provisions, provisions relating to the status under the Act of persons and companies, and provisions regulating the right of persons affiliated with a public-utility company to become affiliated with another such company through acquisition of securities.

COMPOSITION

At fiscal year-end, there were 23 holding companies registered under the Act. Twenty were included in the 17

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"active" registered

holding-company systems.1 The remaining three regis. tered holding companies, which are relatively small, are not considered part of "active" systems.2 In the 17 active systems, there were 91 electric and/or gas utility subsidiaries, 57 nonutility subsidiaries, and 16 inactive companies, or a total, including the parent holding companies and the subholding companies, of 184 system companies. The table on page 171 lists the active systems and their aggregate assets.

PROCEEDINGS

Delmarva Power & Light Company.3 The Commission instituted a proceeding under Section 11(b)(1) of the Act, which requires the Commission to limit operations of each registered holding company system to a single integrated electric or gas utility system. Retention of one or more additional integrated electric or gas utility systems is permitted only upon showing compliance with standards contained in that section. Delmarva, which operates both electric and retail gas distribution systems in Delaware and has electric utility subsidiary companies operating in two other states, has asserted that its properties are retainable under the standards of the Act and that its principal integrated public-utility operation is its electric system. Hearings began in September 1972.

New England Electric System.4 This proceeding involves the proposed creation of a new holding company system to include Boston Edison Company and two registered holding companies, New England Electric System and Eastern Utilities Associates. Briefs were filed with the hearing officer during the fiscal year. After fiscal year-end, the hearing officer filed an initial decision approving the proposal, conditioned upon the granting of access to future major generating facilities of the proposed system to all utilities, cooperatives, and municipalities in the area, together with trans

mission arrangements. The Department of Justice, the Massachusetts Municipal Electric Association and the Division of Corporate Regulation oppose the proposed affiliation and filed petitions for review of the initial decision with the Commission. Their petitions, and a petition filed by the applicants, were granted by the Commission on September 15, 1972.

American Electric Power Company, Inc.5 This proceeding involves the proposed acquisition by American Electric Power of the common stock of Columbus and Southern Ohio Electric Company, a nonassociate electric utility company, in exchange for AEP's stock. Hearings were concluded during the fiscal year. Shortly thereafter, AEP submitted a settlement proposal conditioned on Commission approval of the proposed acquisition. The proposal provided in part that AEP would offer to sell certain generating units to Ohio municipalities distributing power to consumers. The Commission determined to defer consideration of AEP's proposals until it could consider the evidence after the hearing officer had submitted an initial decision. The Division of Corporate Regulation and the Department of Justice filed briefs with the hearing officer opposing the proposed acquisition, urging (among other things) that it would have anti-competitive effects, contrary to the standards of the Act.

Louisiana Power & Light Company.6 The court of appeals affirmed the Commission's decision authorizing Louisiana Power and Light, an electric utility subsidiary company of Middle South Utilities, Inc., to issue and sell certain securities in connection with the financing of its construction program. The cities of Lafayette and Plaquemine, La., which sought intervention in the proceedings before the Commission, alleged that certain unrelated activities of the applicant were in violation of the Federal antitrust laws.

Middle South Utilities, Inc. In a re