California Public Utilities Commission president Mike Peevey ordered the commission staff October 6 to initiate a rulemaking investigating the relationship between the state?s three regulated energy utilities and their holding companies. The action follows the recent repeal of the federal Public Utility Holding Company Act in national energy policy legislation. "This will not be an open-ended fishing expedition," Peevey said. He added that it is ?healthy for ratepayers and the utilities to undertake this review." At the same time, he tried to placate those in the investment community, urging them to "not view this effort with alarm." Peevey said that repeal of the 1935 federal statute essentially transfers to states the job of protecting utility ratepayers from potentially risky mergers and acquisitions by their parent companies. The new law, however, gives the Federal Energy Regulatory Commission new merger authority. Commissioner Geoffrey Brown strongly supported the move, noting that state regulators opened the door to supply deals between utilities and their unregulated affiliates. A rulemaking was in order to make sure that parent holding companies? budget decisions were not "jeopardizing" the needs of their utilities, including their ability to buy power supplies. CPUC staff are to present the order instituting rulemaking to the commission on October 27.