Law's Demise Powers Utilities

Repeal of a Depression-era law that sharply limited who could own public utilities has sparked a conflagration of merger activity in the sector -- and the flames look far from quenched.

The Public Utility Holding Company Act, a law established in 1935 that restricted consolidation in the utility sector, was lifted Feb. 8, making way for growth-hungry heavyweights such as Berkshire Hathaway(BRKA Quote) and General Electric(GE Quote) to get a bigger piece of the U.S. utility businesses.

On Monday, two U.S. utility companies were part of the action. KeySpan(KSE Quote), the New York utility firm, confirmed a deal in which Britain's National Grid(NGG Quote) will buy it for $7.3 billion in cash, plus assumed debt. The transactions will double the size of National Grid's U.S. business, giving the company 8 million customers in New York, New Hampshire, Massachusetts and Rhode Island. ...