Edison Electric Institute (EEI) President Tom Kuhn issued the following statement on passage by the House Agriculture Committee of legislation to ensure appropriate implementation of the 2010 Dodd-Frank law. EEI is the association of U.S. investor-owned electric companies, representing about 70 percent of the nation’s power sector.
EEI President Tom Kuhn applauded the House Agriculture Committee’s bipartisan approval of legislation that will preserve the ability of commercial end-users, such as electric utilities, to use over-the-counter (OTC) derivative contracts to manage commodity risk on behalf of their customers.
“This legislation will ensure that energy end-users are not miscast as ‘swaps dealers’ in rules that are being written to implement the 2010 Dodd-Frank financial reform law,” Kuhn said.
Derivatives enable utilities and energy companies to insulate their customers from volatile wholesale natural gas and power markets. “Utilities’ use of these financial instruments to hedge commodity risk poses no systemic threat to the larger financial system,” Kuhn underscored.
EEI looks forward to working with House and Senate lawmakers to ensure effective implementation of the Dodd-Frank law by the Commodity Futures Trading Commission, Kuhn said.