WASHINGTON – U.S. Senator John Boozman, Chairman of the Senate Appropriations Committee’s Subcommittee on Financial Services and General Government (FSGG), has been assured by U.S. Commodity Futures Trading Commission (CFTC) Chairman Timothy Massad that he will recommend the commission abandon its proposal to allow rights of action against Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) which could have led to unnecessary electricity increases for Arkansans and people all across the country.
Earlier this year, Boozman led efforts to prevent CFTC from adopting its proposal. In April, Boozman included a bipartisan amendment in the Senate Committee on Agriculture, Nutrition and Forestry markup on CFTC reauthorization that would ensure the current regulatory framework remains in place and prevent inconsistent regulations between the Federal Energy Regulatory Commission (FERC) and CFTC.
CFTC’s proposal was opposed by many consumer groups who made their concerns known to the agency during the comment period.
“Many commenters noted that FERC and state regulators work to balance the interests of market participants with the protection of consumers of electricity. They also feared that private actions could create costs within the markets in ways that regulators did not anticipate. These appear to be to me valid concerns,” Chairman Massad wrote in a letter to Boozman on Tuesday.
“I appreciate Chairman Massad’s decision. Over the past year, I’ve raised this issue with the chairman during congressional hearings and correspondence with the agency. I appreciate the chairman listening to my concerns and those of others. This is an important decision that will prevent unnecessary increases in electricity costs for consumers in Arkansas and around the country. Additionally, this decision reduces regulatory uncertainty,” Boozman said.
“We are very grateful for Senator Boozman using the influence of his leadership position in the U.S. Senate to help bring a resolution to this proposed regulatory action that had the potential to increase costs to electricity consumers, not only in the 14 states that Southwest Power Pool (SPP) serves, but for the entire country. The wholesale electric markets are already regulated by the Federal Energy Regulatory Commission and the proposed resolution to this issue will still provide CFTC with broad behavioral enforcement authority, but will no longer expand their scope as they had considered doing,”said Nick Brown, President and CEO of SPP, a Little Rock-based nonprofit that manages the electric grid, operates the wholesale electric market and plans transmission for all or parts of 14 states.
Boozman is also Chairman of the Senate Committee on Agriculture, Nutrition and Forestry’s Subcommittee on Commodities, Risk Management, and Trade that has jurisdiction over CFTC.