Public Power Applauds Relief for Electric Consumers and End Users
April 9, 2014
Washington, D.C., April 9, 2014 – The American Public Power Association (Public Power) applauds the House Agriculture Committee’s approval Wednesday of H.R. 4413, the Customer Protection and End-User Relief Act. The legislation includes important relief for public power utilities, including provisions to allow public power utilities to hedge their operations risks on an even playing field with other entities in the energy sector and to clarify that contracts providing volumetric optionality are not swaps.
“We are glad to see the members of the committee working together to provide protections for consumers and end users as they move to reauthorize the Commodity Futures Trading Commission,” said Public Power President and CEO Sue Kelly.
H.R. 4413 includes the provisions of H.R. 1038, the Public Power Risk Management Act (PPRMA), which passed the House 423-0 on June 12, 2013, and has been introduced on a bipartisan basis in the Senate as S. 1082. The Commodity Futures Trading Commission (CFTC) on March 21, 2014, issued a “no-action letter” providing relief along the lines proposed in PPRMA. On April 5, 2014, Acting Chairman Mark Wetjen and Commissioner Scott O’Malia announced they are circulating among their staff a proposed rule that could accomplish the goals of the PPRMA.
These are welcome developments, but Public Power appreciates the inclusion of the provisions of the PPRMA in H.R.4413. It sends a clear message to the CFTC that Congress supports the direction CFTC is taking in the rulemaking process; provides a backstop if the rulemaking process falters or stalls; and, if enacted, would prevent any erosion of relief by future CFTC rules.
APPA is also pleased the legislation requires the Government Accountability Office (GAO) to assess whether CFTC has the resources necessary to accomplish its goals and responsibilities. The Customer Protection and End-User Relief Act refines the oversight and market clarity provided by the Commodity Exchange Act to the benefit of customers and end-users such as public power utilities, but it just as important to ensure that CFTC has the staffing, expertise and technology to do its job.