Energy lobby sends letter to US House members on Dodd-Frank bills

Eight energy trade groups have begun circulating a letter to members of the US House of Representatives in support of two separate bills aimed at minimizing the impact of financial regulatory reform on energy companies and other end-users.

In their letter, these groups wrote that the bills will allow the Dodd-Frank Wall Street Reform and Consumer Protection Act to be "implemented appropriately, will assure a robust commercial end-user exemption as intended by Congress and will not create loopholes in the regulations."

The letter was signed by the American Gas Association, American Public Power Association, Edison Electric Institute, Electric Power Supply Association, Independent Petroleum Association of America, Large Public Power Council, National Rural Electric Cooperative Association and the Natural Gas Supply Association.

The first bill, HR 3527, which was introduced November 30 by Representative Randy Hultgren, an Illinois Republican, would clarify the definition of swap dealer under the Commodity Exchange Act. The bill, which has eight co-sponsors including one Democrat, is aimed at keeping commercial end-users from being defined as swap dealers under the Commodity Futures Trading Commission's new derivatives regulatory regime.

The groups wrote that the definition of swap dealer and the exceptions from the new rules, as proposed by the CFTC, are "overly restrictive, and would result in commercial end-users, who use swaps for hedging purposes, being misclassified as swap dealers, as well as imposing other unnecessary burdens and costs on end-users."

The other bill, HR 2682, would broaden exemptions from new margin rules for companies that use derivatives to manage risks. The bill was introduced in April by Representative Michael Grimm, a New York Republican, and it has four co-sponsors, including two Democrats.

Margin rules proposed by the CFTC and other regulators "are inconsistent, work at cross-purposes with congressional intent, and have caused much uncertainty for commercial end-users," the groups wrote.

--Brian Scheid, brian_scheid@platts.com

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