Energy Legal Blog

The Commodity Futures Trading Commission issued an order August 16 approving a settlement resolving allegations that ConAgra Trade Group, Inc. caused a non-bona fide price to be reported for a NYMEX spot month crude oil futures contract in violation of the Commodity Exchange Act (CEA).  The settlement is noteworthy in that (1) it required ConAgra to pay a $12 million civil monetary penalty (significantly after the event occurred) even though no fraudulent intent or specific injury was alleged, and (2) two of five commissioners dissented vigorously from the majority’s decision to accept the settlement. (more…)

After designating two bilateral Mid-Columbia (Mid-C) electricity contracts traded on the Intercontinental Exchange (ICE) as significant price discovery contracts (SPDC), the Commodity Futures Trading Commission (CFTC), in July 9th orders, designated four additional ICE electricity contracts used in organized Regional Transmission Organization (RTO) markets as SPDCs.  The four contracts are the SP-15 Financial Day-Ahead LMP Peak (SPM) and SP-15 Financial Day-Ahead LMP Off-Peak (OFP) contracts for the California ISO and the PJM Western Hub Real Time Peak (PJM) and PJM Western Hub Real Time Off-Peak (OPJ) contracts for the PJM Interconnection.  SPDC designation subjects these contracts to heightened regulatory oversight and reporting requirements.  At the same time, the CFTC issued two other orders finding that two daily SP-15 and two daily PJM contracts were not SPDCs.  (more…)

In June 25th Orders, the Commodity Futures Trading Commission (CFTC) for the first time designated two monthly electricity contracts traded at the Mid-Columbia (Mid-C) hub on the Intercontinental Exchange (ICE) - the Mid-C Financial Peak (MDC) and Mid-C Financial Off-Peak (OMC) - as significant price discovery contracts (SPDC) under §2(h)(7) of the Commodity Exchange Act (CEA).  (Two other daily ICE contracts traded at Mid-C - Mid-C Financial Peak Daily and Mid-C Financial Off-Peak Daily - were not so designated.)  SPDC designation subjects the contracts to heightened regulatory oversight and reporting requirements. (more…)

The Commodity Futures Trading Commission (CFTC) voted unanimously April 27 to designate seven natural gas contracts traded on the Intercontinental Exchange Inc. (ICE) as “significant price discovery contracts,” or SPDCs.  These actions represent the U.S. Government’s first significant foray into the regulation of over-the-counter (OTC) derivatives transactions, which are currently the subject of Congress’s attention in Washington.  In addition, these actions may evidence the CFTC’s interest in pursuing increased enforcement efforts and a greater presence in the energy sector. The CFTC has yet to act on 16 electricity contracts and one refined petroleum contract that have been identified in the Federal Register as potential SPDCs. (more…)

Wending its way to FERC on exception (appeal) is Administrative Judge Carmen Cintron’s January 22 initial decision finding that lead natural gas trader for hedge fund Amaranth Advisors, Brian Hunter, manipulated the price of New York Mercantile Exchange (NYMEX) natural gas futures contracts in order increase earnings on futures look-alike contracts (primarily swaps) that Amaranth concurrently held on the largely unregulated exchanges, Intercontinental Exchange (ICE) and Clearport, or over-the-counter (OTC).  How FERC rules on legal issues on appeal should be instructive of how the agency will define market manipulation in both natural gas and electric power markets going forward. (more…)

PR News announced that Bracewell & Giuliani’s Energy Legal Blog will be recognized as the best “Legal PR Blog” at its annual Corporate Social Responsibility & Legal Awards Luncheon on February 24, 2010 at the National Press Club in Washington, D.C. This award recognizes an outstanding and influential law-related weblog or online journal written by a representative of the organization with the goal of espousing the brand or a certain message and written with flair and personality.

“Managing a crisis and working with legal counsel are two areas of communication that will always be a part of a PR professional’s responsibilities,” notes Diane Schwartz, vice president of PR News. “The Legal PR Awards shines a light both on how law firms are communicating to their stakeholders and to how the PR industry is in the driver’s seat when a crisis hits.”

More information on the award program and this year’s winners is available at http://www.prnewsonline.com/awards/csr2009_event-finalists.html.