CFTC Proposed Order: Relief for Certain Non-Financial Energy Transactions between Government and Cooperatively-Owned Electric Utilities
|FINAL RULE: This page refers to the proposed order to exempt certain derivatives between government and ccoperatives. The Final Order was approved April 2, 2013.|
|Proposal Date||Comment Deadline||Final Rule Issue/Effective Date|
|August 23, 2012||September 24, 2012||April 2, 2013|
On August 17, 2012, the CFTC issued a proposed order that would grant exemptive relief on non-financial energy derivative transactions between and among government-owned electric utilities and cooperatively-owned electric utilities ("electricity co-ops"). The proposed rule was approved unanimously in a seriatim vote on August 17, 2012. The rulemaking appeared in the Federal Register on August 23, 2012, and the deadline for public comment was September 24, 2012. Comments can be viewed HERE.
On October 11, 2012, the CFTC issued no-action relief for this proposed order until March 31, 2013, or until such time as the commission takes final action on the order.
Among the provisions of the Dodd-Frank Act is a requirement that the CFTC provide certain electric utilities an exemption to the the clearing mandate and other Dodd-Frank related rules if it is deemed by the commission to be "in the public interest."
Summary of the Proposed Order
The entities to which relief would be granted are described in Section 201(f) of the Federal Power Act (FPA), which includes:
- government-owned electric utilities;
- electric cooperatives that receive financing from the Rural Utilities Service; and
- electric facilities owned by Federally-recognized Indian tribes.
The types of transactions that would qualify for the proposed relief are those intended for making or taking physical delivery of the underlying commodity upon which the transaction is based, and are intended to facilitate the generation, transmission, and/or delivery of electric energy. Relief is limited to these categories:
- electric energy delivered,
- generation capacity,
- transmission services,
- fuel delivered,
- cross-commodity pricing, and
- other goods and services.
Related Documents: Q&A, Federal Register Entry