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.
Definition of “Swap”: Which electricity transactions are physical forwards and which are swaps? How is “intent to take delivery” gauged in the market for electricity transmission? Are Financial Transmission Rights swaps? How would an exemption under section 4(c) of the Commodity Exchange Act (CEA) be handled for these transactions?
Eligible Contract Participant (ECP): In the past, some NFPEEU members have qualified as “eligible commercial entities” to enter into certain swaps, but new section 2(e) of the CEA has restricted or eliminated the exception for eligible commercial entities. NFPEEU would like the ECP definition to be amended to include eligible commercial entities.
General: NFPEEU asked that the CFTC endeavor to provide consistent definitions of terms (e.g. “off-facility transactions”) that appear in multiple rulemakings. They would like an opportunity to comment on all the rules after the last Dodd-Frank Act rulemaking has been proposed. They would like the opportunity to comment on the impacts under the Regulatory Flexibility Act and the Paperwork Reduction Act of all the rulemakings as a whole.
