WASHINGTON -- The Federal Energy Regulatory Commission recently finalized rules that would prevent distressed electric utilities from raiding their affiliates for cash by requiring them to give notice if their capitalization drops below 30 percent.

Reacting to abuses by bankrupt energy trader Enron Corp. and others, FERC is cracking down on the way utilities move money from parent to subsidiary units through so-called "cash pool" programs.

FERC's finalized rules require utilities to give notice if their capitalization drops below 30 percent, and when it rises above that level. The agency is trying to prevent financially weak utilities from improperly draining cash from their subsidiaries.

FERC proposed the rules in August 2002 after completing an investigation that found that Enron improperly borrowed about $1 billion from two of its pipeline affiliates before it filed for bankruptcy in December 2001.

"We just had no idea how much of this cash was being swept up into the holding companies and therefore would be potentially unreachable in the event of a bankruptcy," FERC Chairman Pat Wood said.

FERC has withdrawn a prior proposal that would have required utilities to maintain a 30 percent capitalization to participate in cash management programs.

Utilities say the cash pools are helpful because they allow subsidiaries to benefit from a parent firm's access to lower-cost funds and avoid higher borrowing costs. Chicago-based Exelon Corp. , one of the nation's largest utilities, had warned the 30 percent barrier sends improper signals to investors that the utility is financially weak.