Energy & Commodities Resource Center Blog

FERC Commissioners Receive ISO/RTO Gas-Electric Coordination Reports at Open Meeting, Significant Issues Remain

Cadwalader — Mon, 20 May 2013 21:23:45 +0000

By Gregory Lawrence, Terence Healey and Ryan Norfolk

As natural gas prices have decreased in the United States, electricity market operators’ reliance on gas-fired generation to serve consumers’ needs has steadily increased. This increased reliance has sharpened the focus on significant impediments resulting from a somewhat disjointed relationship between the electric and natural gas industries. These impediments, in concert with weather events and maintenance scheduling, have resulted in generator unavailability during times of system stress due to, among other reasons, a lack of consistent fuel supply. There has been no shortage of finger-pointing on this front among system operators, natural gas pipelines and suppliers, and generators with capacity obligations. read more

SAVE THE DATE: 2013 Energy & Commodities Conference

Cadwalader — Wed, 24 Apr 2013 19:03:56 +0000

Cadwalader, Wickersham & Taft LLP will be hosting its annual Energy & Commodities Conference in Houston, Texas. This complimentary day and half program will feature informative presentations and panel discussions on the evolving regulatory, business, and legal issues affecting the U.S. and international energy and commodities markets.

October 10-11, 2013

The Houstonian Hotel, Club & Spa
111 North Post Oak Lane
Houston, Texas

New York CLE credit will be offered. Additional accreditation is pending.

Please note this event is closed to members of the press. Additional information to follow.

If you have any questions, please contact Allison Geggatt at allison.geggatt@cwt.com.

Recording of Nuts and Bolts of SDR Reporting Webinar Released

Cadwalader — Fri, 05 Apr 2013 20:20:17 +0000

On March 22, Cadwalader, Wickersham & Taft LLP and IntercontinentalExchange hosted a webinar addressing the frequently asked questions regarding the mechanics of reporting to swap data repositories. Cadwalader attorney Athena Eastwood led the discussion, joined by Kara Dutta, Assistant General Counsel of IntercontinentalExchange.

Topics included:

ICE SDR Overview
How to Report to an SDR: Options; Commodity Trade Options; Swaps; and Exotic Swaps
Ensuring Data Accuracy
Reporting of EFRP Transactions
Reporting of Continuation Data (e.g., exercises of options, novations)
Inter-affiliate Transactions
Historical Swap Reporting
Real Time Reporting

Contact Allison Geggatt at allison.geggatt@cwt.com for a copy of the materials and a link to a recording of the program.

CFTC Issues Final Exemption Order for RTO/ISO Transactions

Cadwalader — Wed, 03 Apr 2013 14:57:29 +0000

The Commodity Futures Trading Commission (“CFTC” or “Commission”) on March 28, 2013, issued its final order exempting certain regional transmission organizations and independent system operators (“RTO/ISOs”) and specified transactions in their respective markets, from all but the general anti-fraud and anti-manipulation authority, and scienter-based prohibitions of the Commodity Exchange Act (“CEA”) and CFTC regulations thereunder (“Final Order”). The Final Order was issued in response to a request for exemption filed pursuant to Section 4(c) of the CEA by the California Independent System Operator Corporation (“CAISO”), Electric Reliability Council of Texas, Inc. (“ERCOT”), ISO New England, Inc. (“ISO-NE”), Midwest Independent Transmission System Operator, New York Independent System Operator, and PJM Interconnection, LLC (“Requestors”). The Requestors sought exemption for specified transactions authorized under tariffs or protocols approved by the Federal Energy Regulatory Commission (“FERC”) or, in the case of ERCOT, the Public Utility Commission of Texas (“PUCT”), and for any persons, including the Requestors and their members or other market participants offering, entering into, rendering advice, or rendering other services with respect to the specified transactions. As described below, each Requestor must comply with certain conditions prior to the exemption becoming effective, and the Commission separately extended existing interim relief to provide time for Requestors to meet these conditions. read more

Paul J. Pantano, Jr.
paul.pantano@cwt.com
+1 202 862 2410

Gregory K. Lawrence
greg.lawrence@cwt.com
+1 212 504 6171

Terence T. Healey
terence.healey@cwt.com
+1 202 862 2335

Sohair A. Aguirre
sohair.aguirre
+1 202 862 2278

Futures & Derivatives Law Report: Energy Commodities – The Netherworld Between FERC and CFTC Jurisdiction

Cadwalader — Fri, 29 Mar 2013 20:14:07 +0000

Paul J. Pantano, Jr., Terence Healey, and Joseph Williams authored an article entitled, “Energy Commodities – The Netherworld Between FERC and CFTC Jurisdiction” in the March issue of Futures & Derivatives Law Report.

To view the full article, click here.

DC Circuit Court Holds FERC Lacks Jurisdiction in Hunter v. FERC

Cadwalader — Mon, 18 Mar 2013 16:49:47 +0000

On Friday, March 15, 2013, the United States Court of Appeals for the D.C. Circuit held that “[b]ecause manipulation of natural gas futures contracts falls within the CFTC’s exclusive jurisdiction and because nothing in the Energy Policy Act clearly and manifestly repeals the CFTC’s exclusive jurisdiction,” the FERC lacked jurisdiction to prosecute Brian Hunter, a former Amaranth Advisor’s trader. Slip Op. at 2. The court’s decision is very broad and may severely constrain FERC’s ability to prosecute alleged manipulations of transactions subject to the CFTC’s exclusive jurisdiction even if the alleged manipulation affects FERC-jurisdictional markets.

Based upon its analysis of the statutory text, the court concluded that “[b]y CEA section 2(a)(1)(A)’s plain terms, the CFTC has exclusive jurisdiction over the manipulation of natural gas futures contracts.” Id. at 7. According to the court, “the CFTC’s jurisdiction is exclusive with regards to accounts, agreements, and transactions involving commodity futures contracts on CFTC-regulated exchanges.” Id. at 8. As a consequence, “if a scheme, such as manipulation, involves buying or selling commodity futures contracts, CEA section 2(a)(1)(A) vests the CFTC with jurisdiction to the exclusion of other agencies.” Id. (Emphasis added). Elaborating on this point in a comment with incredibly broad implications, the court explained that “once a scheme crosses the statute’s event horizon, the CFTC has exclusive jurisdiction.” Id. at 9. The court also held that nothing in Section 4A of the NGA (1) permits the FERC to “intrude upon,” or (2) impliedly repealed, the CFTC’s exclusive jurisdiction. Id. at 10 and 12.

The facts in Hunter pre-date the amendments to the CEA made by the Dodd-Frank Act. The CFTC now has exclusive jurisdiction over futures and options on futures transactions, and commodity swap transactions traded or executed on a CFTC-regulated contract market (exchange), swap execution facility, or “any other . . . market.” Thus, if an alleged manipulative scheme involves any of the types of transactions within the CFTC’s exclusive jurisdiction and, therefore, “crosses the statute’s event horizon,” FERC arguably lacks jurisdiction to prosecute the alleged manipulative conduct even if it is “in connection with” a FERC-jurisdictional transaction.

For more information, please contact one of the following Cadwalader attorneys:

Paul J. Pantano, Jr.
paul.pantano@cwt.com
+1 202 862 2410

Doron F. Ezickson
doron.ezickson@cwt.com
+1 202 862 2430

Kenneth W. Irvin
ken.irvin@cwt.com
+1 202 862 2315

Gregory K. Lawrence
greg.lawrence@cwt.com
+1 212 504 6171

Terence T. Healey
terence.healey@cwt.com
+1 202 862 2335

Joseph B. Williams
joseph.williams@cwt.com
+1 202 862 2480

Have Your Say and Win! Complete Our 2013 Annual Conference Survey

Cadwalader — Thu, 07 Mar 2013 20:58:49 +0000

Location? Timing? Topics? Your feedback is critical to our programming.

Help us create an informative program by completing our survey! One respondent will be randomly selected to win a $25 gift card.

Cadwalader Names J.P. Morgan Deal Maker James Woolery as Deputy Chairman and Co-Chair of Corporate Department

Cadwalader — Mon, 04 Mar 2013 21:42:41 +0000

”J.P. Morgan Deal Maker Joins Law Firm,” read the headline in The Wall Street Journal, which announced that James Woolery will join Cadwalader as Deputy Chairman and Co-Chair of the Corporate Department.

Woolery, who is widely recognized as one of the country’s leading M&A advisors, was co-head of North American Mergers and Acquisitions at JPMorgan Chase & Co. He has been involved in some of the most important M&A transactions in recent history.

“Jim Woolery is the epitome of the Cadwalader lawyer – an exceptional legal mind that can fashion practical business solutions to complex legal problems,” said W. Christopher White, Chairman of Cadwalader.

“Joining Cadwalader allows me to return to the practice of law while continuing to advise CEOs, general counsels and boards of directors on critical issues relating to corporate strategy and business risk,” Woolery said. “Cadwalader’s rich history of combining leading legal and regulatory counsel with a deep understanding of business operations and strategy will allow us to continue to meet increasingly complex client needs in an evolving market environment. I feel energized and humbled to have the opportunity to join the partnership and work with the firm’s stellar team of lawyers.” read more

Energy Tax Provisions in the American Taxpayer Relief Act of 2012

Cadwalader — Thu, 28 Feb 2013 22:52:01 +0000

On January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 (the “Act”), which averted the “fiscal cliff.” The Act contains several significant energy-related tax provisions. read more

Antitrust Division Enters Into First Deferred Prosecution Agreement

Cadwalader — Wed, 27 Feb 2013 22:42:00 +0000

In a first for the Department of Justice (“DOJ”) Antitrust Division, the Division entered into a Deferred Prosecution Agreement (“DPA”) with a financial institution for its involvement in an alleged LIBOR-rate manipulation scheme. As part of the agreement, the company’s Japanese subsidiary agreed to plead guilty to wire fraud in connection with the alleged LIBOR rate-rigging. read more