On May 15, APGA filed joint comments on a Commodity Futures Trading Commission (CFTC) proposed rule regarding speculative position limits on certain commodities, including natural gas, with the American Public Power Association (APPA) and the National Rural Electric Cooperative Association (NRECA). APGA, through the joint comments, requested an exemption from this proposed rule for all not-for-profit energy utilities, which includes APGA members. If granted, this exemption would relieve APGA members of certain regulatory burdens and costs resulting from the need to demonstrate that their commodity trading activities fall into CFTC's definition of "bona fide hedging transaction or position."
The proposed rule is intended to address laws Congress passed after events contributing to the 2008 recession to try and reduce market volatility but maintain liquidity by limiting the of amount speculative trading in the commodities market. However, APGA members are commercial or non-financial market participants that Congress did not intend to be regulated in this manner, as they do not speculate nor hold speculative positions but do take part in commercial risk hedging in order to provide cost-effective utility service operations.
A copy of the final comments is available here
. For questions on this article, please contact Renée Lani of APGA staff by phone at 202-464-0836 or by email at firstname.lastname@example.org