In July 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which, among other things, granted to the Commodity Futures Trading Commission (“CFTC”) comprehensive authority to regulate financial transactions involving commodities, including exchanged-traded futures and over-the-counter derivatives involving natural gas. The CFTC has issued more than 30 proposed rules and advance proposals to implement the provisions of the Dodd-Frank Act. Key rulemakings include defining who would be subject to the greatest regulatory scrutiny – swap dealers, major swap participants, swap executive facilities, derivatives clearing organizations, etc.; who would not – end-user exemption from mandatory clearing; the clearing requirements; the reporting and recordkeeping requirements; and enforcement.
AGA member companies provide natural gas service to retail customers under rates, terms and conditions that are regulated at the local level by a state commission or other regulatory authority with jurisdiction. Many gas utilities use a variety of financial tools, such as futures contracts traded on CFTC-regulated exchanges and over-the-counter energy derivatives, to hedge the commercial risks associated with providing natural gas service, particularly volatility in natural gas commodity costs. AGA believes that the CFTC’s rulemakings to implement the Dodd-Frank Act should ensure that the financial markets related to energy commodities function efficiently and protect the ability of commercial hedgers to engage in risk management activities at reasonable cost for the benefit of American energy consumers.
AGA Contact: Arushi Sharma | 202.824.7120 | firstname.lastname@example.org