On October 20, 2009, the General Counsel for the Federal Energy Regulatory Commission (“FERC” or the “Commission”) submitted comments to the Commodity Futures Trading Commission (“CFTC”) stating that FERC has exclusive jurisdiction over the transmission and sale of electricity in interstate commerce or with regulation of wholesale energy markets.
On September 22, 2009, the CFTC issued a notice of action and request for comment on several electricity contracts trading on the IntercontinentalExchange, Inc. (“ICE”). ICE is an exempt commercial market, and as such, the CFTC requested comments on whether those electricity contracts are subject to significant price discovery contract (“SPDC”) reporting requirements and CFTC oversight. FERC’s letter said that the CFTC’s proposal does not appear to conflict with FERC’s exclusive jurisdiction.
Nonetheless, FERC made clear that in regulating wholesale electricity markets, it has exclusive authority to regulate regional transmission organizations (“RTOs”) and independent system operators (“ISOs”). FERC further noted that its regulation of electric transmission includes the related financial transmission rights, real-time and day-ahead energy markets, capacity markets and ancillary services. FERC also pointed out that Congress specifically noted that FERC’s jurisdiction over RTOs and ISOs is not affected by the SPDC amendments to the Commodity Exchange Act.
The letter comments to the CFTC are available at: http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/frcomment/09-012c001.pdf