Energy Associations Support FERC's Authority to Bring Enforcement Action Against Amaranth
(09/28/2007)
Washington, D.C. September 28, 2007- The American Public Gas Association (APGA), American Public Power Association (APPA) and National Rural Electric Cooperative Association (NRECA) today jointly filed an amicus memorandum of law with the U.S. District Court for the Southern District of New York in support of the Federal Energy Regulatory Commission’s (FERC) authority to bring a July 26, 2007, enforcement action against Amaranth.
FERC issued a show cause order in July against Amaranth, alleging market manipulation of natural gas prices and proposing penalties totaling $291 million. In response to FERC’s enforcement action, Amaranth has argued to the Court its futures trading activities are beyond the jurisdiction of FERC, as only the Commodity Futures Trading Commission (CFTC) has enforcement authority in this area.
FERC has maintained that the new enforcement provisions in the Energy Policy Act of 2005 provide it the authority to prohibit manipulation, not only by direct participants in the physical power and gas markets, but also where any entity manipulates financial markets and such activity directly or indirectly impacts the price of Commission-jurisdictional transactions.
Amaranth seeks to have the Court enjoin the FERC enforcement proceeding, citing the burden and expense of defending its conduct in two separate proceedings at the same time. APGA, APPA and NRECA, however, respond that the two agencies (CFTC and FERC) are enforcing two different statutes, and it is commonplace for entities accused of wrongdoing under two different statutes to defend their actions in simultaneous proceedings.
As groups representing community- and consumer-owned utilities, APGA, APPA and NRECA generally support both agencies’ exercise of jurisdiction. They believe the intent of Congress in providing FERC with its new anti-manipulation authority in the Energy Policy Act of 2005 was to provide consumers with an additional measure of protection.
Contacts:
APGA – Dave Schryver, Phone: 202-464-0835, Email: dschryver@apga.org; APPA – Communications Department, Phone 202-467-2900, email: communicationsdept@appanet.org; NRECA – Patrick Lavigne, Phone: 703-907-5732, email: patrick.lavigne@nreca.coop
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The American Public Gas Association is a national, not-for-profit association of more than 680 municipal and other publicly-owned local distribution systems in 36 states. APGA members own and operate natural gas distribution systems serving their communities and are served by interstate natural gas pipeline systems located across the country.
The American Public Power Association is the service organization for the nation’s more than 2,000 community- and state-owned electric utilities that serve more than 44 million consumers.
The National Rural Electric Cooperative Association is the national service organization dedicated to representing the national interests of cooperative electric utilities and the consumers they serve. NRECA is an advocate for consumer-owned cooperatives on energy and operational issues. NRECA’s more than 900 member cooperatives serve more than 40 million people in 47 states.
