In response to the Public Utility Holding Company Act (PUHCA) repeal in the recent federal energy bill, the California Public Utilities Commission voted unanimously to assess whether new state holding company rules are needed. "Much has changed since the holding companies were formed 10 years ago," said Randy Wu, CPUC general counsel, at the commission's October 27 meeting. The focus of the upcoming rulemaking will be whether and how the flow of money between the affiliated energy utilities and their parent companies may affect the future power infrastructure that California will depend upon, he added. \t "[Our] responsibility to protect ratepayers remains paramount," notes the commission order. \t The commission is requiring Pacific Gas & Electric, Southern California Edison, SoCal Gas, and San Diego Gas & Electric and their corporate parents to submit information on their planned budgets over the next five years. The parent holding companies are also mandated to provide financial information on current and planned investments in power plants and transmission lines in the state. \t Regulators worry that if left unchecked, the corporate parents "may try and expand the unregulated activities of the utilities' affiliates, may try to merge with or acquire other companies, or may be acquired by other companies," according to the decision. It adds that "parent holding companies can require unreasonable fees from their utility subsidiary, preferential treatment of affiliates and\/or set rate and dividend policies that could harm the utility, in particular resource adequacy." \t The holding companies were created a decade ago when the state's deregulation law was being put into place. At that time, the CPUC required that the first priority of the parent be to safeguard the financial needs of the regulated utility so that it could meet its customers' needs. This "first priority" rule was challenged unsuccessfully by the parentcorporations. The one-way flow of money from PG&E to PG&E Corp. is the subject of a pending lawsuit brought by the state (Circuit, Oct. 14, 2005). \t The CPUC noted that it also will consider imposing reporting requirements that detail how capital is allocated between utilities and their unregulated brethren, and clarifying its authority to look at the documents of the holding companies and their affiliates. Also under consideration is changing the commission's affiliate transaction rules, which focus on deals between regulated and unregulated companies within a corporation. The repeal of PUHCA by the federal energy act passed this summer removes the Securities and Exchange Commission role of reviewing mergers and acquisitions. PUHCA aimed at keeping utilities a manageablesize for states.