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AGA

 11/23/2009 

AGA Contacts:
Jennifer O’Shea, 202-824-7023
Jake Rubin, 202-824-7027

 AGA, EEI and EPSA Issue Joint Letter Signed by 70 Companies on Derivatives Regulation   

 
   

WASHINGTON, D.C. – The American Gas Association (AGA), Edison Electric Institute (EEI) and Electric Power Supply Association (EPSA) on Friday sent a joint letter to Congress outlining priorities for reform of the over-the-counter (OTC) derivatives markets.  This unique joint letter was signed by 70 individual companies supporting transparency and stability in OTC derivatives markets.  The letter also noted the need for policy makers to preserve the ability of companies to access critical OTC energy derivatives products and markets.

Commenting on the letter, EPSA president & CEO John E. Shelk said, "The companies represented on this letter support the goals of financial regulatory reform: promoting transparency and better oversight of the derivatives markets.  Unlike purely financial firms, these commercial energy companies use both the OTC and the exchange-based derivatives markets to prudently manage the risks associated with running their businesses.  Their focus is on providing the best possible energy product in the most efficient manner for the consumers they serve.  Necessary financial reform should not include unnecessary clearing and collateral requirements that will needlessly raise costs for end users."

AGA president & CEO David N. Parker said, “’First do no harm’ is an age old adage that Congress should heed when considering proposals to create greater transparency in the OTC markets.  As structured, our members who use OTC derivatives to protect their customers from price volatility could be forced to incur higher transaction costs without any corresponding benefit. We ask Congress to address the real problems related to speculating with derivatives and to avoid unnecessarily increasing their constituents’ energy bills.”

EEI president Thomas R. Kuhn said, “As Congress tackles the issue of systemic risk in the financial reform debate, we hope they will be mindful that our end-use of these financial tools reduces costs to our customers and does not contribute to systemic risk.”

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The American Gas Association, founded in 1918, represents more than 200 local energy companies that deliver clean natural gas throughout the United States. There are more than 71 million residential, commercial and industrial natural gas customers in the U.S., of which 94 percent — over 68 million customers — receive their gas from AGA members. Today, natural gas meets almost one-fourth of the United States' energy needs.

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