TESTIMONY OF COMMISSIONER ISAAC C. HUNT, JR.

                       U.S. SECURITIES AND EXCHANGE COMMISSION

                                  EXECUTIVE SUMMARY

               The Securities and Exchange Commission ("SEC") supports
          efforts to repeal the Public Utility Holding Company Act of 1935
          ("1935 Act") and replace it with legislation that preserves
          certain important consumer protections.

               Congress passed the 1935 Act to correct abusive practices
          that had developed in the electric and gas utility industry.
          However, the 1935 Act has become redundant in many respects, as a
          result of prudent administration of the statute and the
          development and evolution of other state and federal regulation.
          Moreover, the provisions of the Act addressing the problems of
          the past may prevent companies from responding effectively to the
          changes now occurring in the utility industry.

               The SEC staff, at the direction of Chairman Arthur Levitt,
          undertook a study of regulation of public utility companies that
          culminated in a June 1995 report.  Based on the report, the SEC
          has recommended that Congress consider three legislative options
          for eliminating unnecessary regulatory burdens.  The preferred
          option is repeal of the 1935 Act, accompanied by the creation of
          additional authority at the state and federal level to permit the
          continued protection of consumers.  The Federal Energy Regulatory
          Commission ("FERC") should have the authority to exercise
          jurisdiction over transactions among holding company affiliates.
          The FERC and State utility commissions should be able to review
          these transactions by having access to books and records. This
          course of action would achieve the economic benefits of
          unconditional repeal and also protect consumers.

               One of the major issues raised by efforts to restructure the
          electric utility industry relates to "market power" or
          competitive issues.  In recent years, the SEC has, where
          appropriate, looked and "watchfully deferred" to the expertise of
          state and other Federal regulators on competitive issues.  In
          this context, repeal of the 1935 Act would have little effect on
          the federal role in considering market power issues.  While
          providing an additional layer of regulatory approval for certain
          utility mergers, the Commission's reliance on other regulators
          for the key market power determination, makes its oversight
          unnecessary.

               The SEC is aware that proposals of comprehensive reform of
          energy legislation are under consideration by Congress.  Repeal
          of the 1935 Act could also be considered as part of this overall
          reform.  The SEC respectfully defers to the judgment of Congress
          as to whether the public interest is better served by separate
          repeal of the 1935 Act or repeal as part of a larger legislative
          initiative.