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AGA, EEI and EPSA Issue Joint Letter Signed by 70 Companies on Derivatives Regulation
WASHINGTON, D.C. - The American Gas Association (AGA), Edison Electric Institute (EEI) and Electric Power Supply Association (EPSA) on Friday sent a joint letter to Congress outlining priorities for reform of the over-the-counter (OTC) derivatives markets. This unique joint letter was signed by 70 individual companies supporting transparency and stability in OTC derivatives markets. The letter also noted the need for policy makers to preserve the ability of companies to access critical OTC energy derivatives products and markets.
Commenting on the letter EPSA President & CEO John E. Shelk said "The companies represented on this letter support the goals of financial regulatory reform: promoting transparency and better oversight of the derivatives markets. Unlike purely financial firms, these commercial energy companies use both the OTC and the exchange-based derivatives markets to prudently manage the risks associated with running their businesses. Their focus is on providing the best possible energy product in the most efficient manner for the consumers they serve. Necessary financial reform should not include unnecessary clearing and collateral requirements that will needlessly raise costs for end users."
AGA President & CEO David N. Parker said "First do no harm is an age old adage that Congress should heed when considering proposals to create greater transparency in the OTC markets. As structured, our members who use OTC derivatives to protect their customers from price volatility could be forced to incur higher transaction costs without any corresponding benefit. We ask Congress to address the real problems related to speculating with derivatives and to avoid unnecessarily increasing their constituents' energy bills."
EEI President Thomas R. Kuhn said "As Congress tackles the issue of systemic risk in the financial reform debate, we hope they will be mindful that our end-use of these financial tools reduces costs to our customers and do not contribute to systemic risk."
The joint letter may also be downloaded at www.aga.org, www.eei.org, or www.epsa.org.
Joint Letter to Congress
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.