Washington, D.C. — Tuesday U.S. Senators Joe Donnelly (D-IN) and James Inhofe (R-OK) reintroduced the Public Power Risk Management Act, S. 1111, bipartisan legislation that would clarify provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act in order to provide permanent relief to public power utilities and keep energy affordable for Americans.
Donnelly said, “Hoosier families and businesses deserve reliable, affordable energy prices. We should pursue every commonsense solution to make federal regulations work better for American companies and their workers. The Public Power Risk Management Act would do just that. It would ensure a level playing field between public and private power utilities and provide a permanent legislative fix to a problem impacting public power utilities and consumers. I am proud to join my colleague Senator Inhofe in reintroducing bipartisan legislation that would provide regulatory relief to public power utilities.”
Inhofe said, “Many Oklahomans rely on public power, and in recent years, the risk has increased for prices to become unstable and unpredictable. This is an unnecessary consequence of the Dodd-Frank Act, which has prevented public power companies from full access to swap markets, a key method for power companies to reduce volatility in energy prices. I am proud to join Sen. Joe Donnelly in introducing legislation that will ensure public and private power utilities are treated fairly and equally, and in turn will help Oklahoma’s public utilities keep rates affordable and predictable for its customers.”
Indiana Municipal Power Agency (IMPA) President and CEO Raj Rao said, “IMPA is pleased that Sen. Donnelly and Sen. Inhofe are re-introducing the Public Power Risk Management Act during the 114th Congress. We appreciate the Senator’s continued efforts – both legislatively and through his work with the CFTC – to help put public power entities like IMPA on a more even footing with industry when it comes to the ability to hedge power supply risk and mitigate cost volatility for our customers. We are grateful that the CFTC amended its rules last fall to exempt utility operations-related swaps with utility special entities from the $25 million ‘special entity’ sub-threshold. The Donnelly-Inhofe legislation is still necessary to ensure the permanence of the regulatory relief and eliminates the opportunity for that relief to be reversed in the future. Senator Donnelly is a champion for public power, not only in Indiana, but nationally as well.”
Last year, the Commodity Futures Trading Commission’s (CFTC) announced that it approved a final rule to provide relief to public power utilities in Indiana and across the country in order to keep energy affordable for American families. This action was in line with Donnelly and Inhofe’sPublic Power Risk Management Act, first introduced in 2013. Donnelly and Inhofe are reintroducing this bill because this would provide a permanent legislative fix to the problem by clarifying provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This would level the playing field between public and private power utilities, once and for all.
The Public Power Risk Management Act would require that public and private power utilities be treated the same by not requiring the entities they swap with to register as a “swap-dealer” until the swap amount exceeds a CFTC established threshold during the year. The CFTC’s action announced in September 2014 accomplishes that; however the Donnelly-Inhofe legislation would help ensure that this regulatory relief is not revisited in the future and eliminate any ambiguities. Therefore, passage of the Public Power Risk Management Act is still needed to make the changes permanent.
Donnelly and Inhofe’s bill is similar to the legislation they originally introduced on December 11, 2013.
Congressmen Jim Costa (D-CA) and Doug LaMalfa (R-CA) are expected to introduce identical legislation to the Donnelly-Inhofe bill in the House Tuesday.
