Bipartisan Group of Lawmakers Sends Letter to CFTC
Today, House Agriculture Committee Chairman K. Michael Conaway (R-TX), along with Ranking Member Peterson (D-MN), Rep. Austin Scott (R-GA) and Rep. David Scott (D-GA) sent a bipartisan letter to U.S. Commodity Futures Trading Commission (CFTC) Chairman Tim Massad expressing concern with the CFTC’s proposed exemptive order for the Southwest Power Pool, Inc. and the proposed amendment to a 2013 final order regarding six Regional Transmission Organizations (RTO) and Independent System Operators (ISO).
For the first time, the proposals include language articulating the CFTC’s position that market participants affected by the orders may initiate private law suits against utilities, power producers, marketers and other market participants for fraud and manipulation resulting from transactions occurring the electricity markets administered by RTOs and ISOs which are largely regulated by the Federal Energy Regulatory Commission (FERC).
“Given the already heavily regulated nature of electricity markets, and the shared regulatory expertise of these two agencies, Congress required FERC and the CFTC to enter into a Memorandum of Understanding (MOU) to provide a consistent, efficient, and effective framework for energy producers and market participants,” the Members write.
“We recognize the harm to consumers of fraud and market manipulation in electricity markets, and value the CFTC’s vigorous work to police these shared markets. However, to uphold the Congressional intent expressed in Section 720(a) of the Dodd-Frank Act, and to ensure that FERC and the CFTC are able to continue their effective and cooperative monitoring of the energy markets, we urge you to consider the possibility that the proposals will result in widespread, inconsistent judicial interpretations of the Commodity Exchange Act.”