CFTC action praised by House Ag Committee
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WASHINGTON, Sept. 17, 2014 - The Commodity Futures Trading Commission voted to loosen a regulation on the energy market that lawmakers say will stabilize energy costs and benefit American consumers.
CFTC's vote exempts producers, utility companies, and other non-financial entities from being required to register as swap dealers when they enter into energy contracts with government-owned entities. Under the Dodd-Frank Act, CFTC's previous regulations, non-financial entities could engage in $25 million in swap activities with a public utility company before being required to register as swap dealers. This is compared to the $3 billion exemption with private companies."
The move closely resembles legislation introduced last year by House Agriculture Committee member Rep. Doug LaMalfa, R - Calif., H.R. 1038, the Public Power Risk Management Act. The legislation unanimously passed through the House of Representatives, but was never taken up by the Senate.
LaMalfa said CFTC's action will protect consumers from high energy costs.
“Not only will the CFTC's decision to implement this rule help to ensure continued growth in our agriculture sector, but most importantly, it will protect public power utilities' access to risk management practices, and in turn, protect American ratepayers from escalating energy prices due to misguided regulations," LaMalfa said in a statement released by the House Ag Committee.
Committee chair Frank Lucas, R - Okla., said he was pleased to see this vote, especially in the first open meeting under new CFTC Chair Timothy Massad.
“It is encouraging to see common sense has prevailed on a regulatory issue that is critical to the livelihoods of so many. The House acted with one, united voice and I applaud the CFTC for following suit thereby protecting Americans from electricity and natural gas rate increases," said Chairman Frank Lucas.
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