United States: Representatives Argue That Creating A Private Right Of Action Under The CEA Will Cause Regulatory "Uncertainty"

Four House Agriculture Committee members expressed concern about the CFTC proposal to allow private lawsuits regarding transactions in wholesale electricity markets that are regulated by the Federal Energy Regulatory Commission ("FERC").

In a letter addressed to CFTC Commissioner Timothy G. Massad, the Representatives specified that the private right of action created by the proposed amendment under the Commodity Exchange Act ("CEA"), Section 22 would lead to "inconsistent judicial interpretations of the CEA resulting from private suits [that] could create uncertainty for the nation's electricity markets and their participants." The Representatives expressed the significance of such regulatory uncertainty:

The Representatives emphasized that the proposed private right of action would undermine the "carefully negotiated" Memorandum of Understanding between FERC and the CFTC by "opening market rules to judicial interpretation that will likely result in inconsistent determinations across the country."

The letter was signed by Representatives K. Michael Conaway (R-TX), Collin C. Peterson (D-MN), Austin Scott (R-GA) and David Scott (D-GA).

Commentary - Bob Zwirb

The letter was signed by the leadership of both parties. Members of the House Agricultural Committee joined the staff of FERC and members of the CFTC's own Energy and Environmental Markets Advisory Committee in questioning the wisdom of the CFTC's proposal to allow private rights of action in the RTO/ISO marketplace.

Commentary - Steven Lofchie

Overlapping, duplicative and confusing regulations imposed by multiple regulators on exactly the same activity is bad public policy.

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