CFTC Issues Proposed Order to Exempt Certain Transactions for Regional Transmission Organization
The CFTC issued a Notice of Proposed Order and Request for Comment concerning an exemption of certain transmission congestion rights, energy transactions and operating reserve transactions for a regional transmission organization. The exemption would relieve Southwest Power Pool, Inc. from provisions of the Commodities Exchange Act and CFTC Rules.
The proposed order would exempt contracts, agreements and transactions for the purchase or sale of these limited electric energy-related products. Provisions related to the CFTC's general anti-fraud and anti-manipulation authority and scienter-based prohibitions under the CEA would not be exempt. According to the order, to be eligible for the proposed exemption, a Southwest Power Pool Inc. ("SPP") contract, agreement or transaction is required to be offered or entered into in a market administered by SPP for the purposes of allocating SPP's physical resources. Additionally, the contract, agreement or transaction would be required to be offered to or entered into by persons who qualify as "appropriate persons" or "eligible contract participants" as defined in the CEA Section 4 and Section 1a(18), respectively.
In its press release, the CFTC noted that the proposed order is similar to the Final Order published on April 2, 2013, which exempted certain specified transactions by six other RTOs and Independent System Operators from certain provisions of the CEA and CFTC Rules.
The comment period will be open for 30 days after the publication of the request in the Federal Register.
See: CFTC Press Release; Proposed Order and Request for Comment.Related news: CFTC Extends No-Action Relief to Southwest Power Pool (CFTC Letter 15-05) (February 27, 2015); FERC Accepts Proposal to Integrate WAPA, Basin Electric and Heartland as New SPP Members (November 11, 2014); CFTC Staff Issues Extension of No-Action Relief to Southwest Power Pool (CFTC 14-109) (with Lofchie Comment) (August 22, 2014); CFTC Issues No-Action Relief to Southwest Power Pool (CFTC Letter 14-18) (with Lofchie Comment) (February 20, 2014).