Meeting Date:
Wednesday, January 19, 2011
CFTC Staff:
Dan Berkovitz
Julian Hammar
Lee Ann Duffy
Mark Fajfar
Jeff Burns
Susan Nathan
David Taylor
Irina Leonova
Tom Leahy
Jeff Steiner
Peter Sanchez
Organization(s):
National Rural Electric Cooperative Association
American Public Power Association
American Public Gas Association
Large Public Power Council
ACES Power Marketing
Schiff Hardin LLP
Wilmer Cutler Pickering Hale and Dorr LLP
External Attendees:
Russell Wasson (National Rural Electric Cooperative Association)
Julie Barkemeyer (National Rural Electric Cooperative Association)
Susan Kelly (American Public Power Association)
David Schryver (American Public Gas Association)
Noreen Carter-Roche (Large Public Power Council)
Jeffrey Walker (ACES Power Marketing)
Patricia Dondanville (Schiff Hardin LLP)
Paul M. Architzel (Wilmer Cutler Pickering Hale and Dorr LLP)
Josh Kans (SEC)
Peter Curley (SEC)
Additional Information:
NFPEEU, as a whole, stressed that they are not financial entities, engage in no speculation and perform a public service.
NFPEEU believes its members are in a special situation because they are all non-profit entities and any increased costs they bear must be passed directly to ratepayers (i.e.., they do not have shareholders to absorb losses). Also, in terms of their use of swaps, they are required to enter into a variety of different types of customized swaps to reduce the risks of energy commodity price fluctuations because they are mandated to provide continuous electric service to their customers and must deal with a variety of variable conditions, such as changing weather patterns and different sized customer bases. The swaps they use are mostly energy commodity swaps.
NFPEEU commented on several rulemakings.
Interim Final Rule on Record Retention: Which records should NFPEEU members retain regarding the valuation of electricity and other energy commodity swaps, and regarding the risks hedged by the swaps? NFPEEU commented that its members should be required to retain the records that they believe in good faith are relevant to valuation and hedging. Also, NFPEEU believes that its members will have special difficulty in distinguishing records when a single master agreement covers both financial swaps and physical electricity and other commodity swaps. The smaller members will have difficulty managing and tracking the documentation.
