Since this is the beginning of NEM’s 15th Year, we have made special plans to celebrate this milestone at our 15th Annual National Restructuring Conference in Washington, DC on April 24 and 25, 2012. The Conference will be held at the Embassy Suites DC Convention Center, 900 10th Street, NW, Washington, DC. The Agenda is available at this hotlink.

Public Service Commission Chairs, Commissioners and other elected and appointed officials from around the country have confirmed their participation. Your sponsorship and support would be very helpful to make this NEM Event the best ever.

Sponsorship opportunities for this event can be viewed online at this hotlink.

Early registration for the April event is available online at this hotlink.

CFTC adopted definitions of the terms “swap dealer,” “major swap participant,” and “eligible contract participant” under Dodd Frank. The final rule definition of “swap dealer” follows that set forth in Dodd Frank:

"i. holds itself out as a dealer in swaps,
ii. makes a market in swaps,
iii. regularly enters into swaps with counterparties as an ordinary course of business for its own account, or
iv. engages in activity causing itself to be commonly known in the trade as a dealer or market maker in swaps."

An interim final rule will provide an exception to the definition of swap dealing for swaps in certain situations for the purpose of hedging a physical position. The final rules establish a de minimis exception to the “swap dealer” definition when the aggregate gross notional amount of the swaps that the person enters into over the prior 12 months in connection with dealing activities does not exceed $3 billion.

A “major swap participant” is defined as:
"1. A person that maintains a “substantial position” in any of the major swap categories, excluding positions held for hedging or mitigating commercial risk and positions maintained by certain employee benefit plans for hedging or mitigating risks in the operation of the plan.
2. A person whose outstanding swaps create “substantial counterparty exposure that could have serious adverse effects on the financial stability of the United States banking system or financial markets.”
3. Any “financial entity” that is “highly leveraged relative to the amount of capital such entity holds and that is not subject to capital requirements established by an appropriate Federal banking agency” and that maintains a “substantial position” in any of the major swap categories."

CFTC adopted a final rule to permit commodity options to transact subject to all rules and regulations applicable to any other swap. It additionally issued an interim final rulemaking that proposes to provide a trade option exemption from the general swaps rules, for certain physical delivery commodity options. However, there would be conditions for the exemption including position limits, large trader reporting, appropriate recordkeeping and reporting requirements, antifraud and anti-manipulation rules, and the retention of certain swap requirements for swap dealers and major swap participants that engage in trade options. Comments on the interim final rule are due within sixty days after publication in the Federal Register.

CFTC Fact Sheets on the Rulemakings are available on the NEM Website. The Final Rule and Interim Rule on Commodity Options is also available on the NEM Website.

At yesterday's Commission meeting, Staff presented its 2011 State of the Markets Report. Highlights of the Report include:

1. Natural gas production reached an all-time record in 2011;
2. Record high natural gas storage inventories were seen heading into winter 2011/12;
3. Natural gas prices fell to a ten year low to under $3/MMBtu;
4. U.S. natural gas consumption in 2011 was up less than 1% over 2010 with most of the growth accounted for by natural gas-fired power generation;
5. Power prices in 2011 were down throughout the U.S., with the exception of the ERCOT area and Cinergy trading hub. On average, nationwide power prices were down 0.5% from last year; and
6. Demand response participation in the RTOs has been increasing and grew by 40% last year in the Northeast to 20 GW of cleared capacity.

The full text of the State of the Markets Report is available on the NEM Website.

FERC is proposing to incorporate by reference in its regulations the business practice standards adopted by NAESB pertaining to the measurement and verification (M&V) of demand response and energy efficiency resources participating in organized wholesale electricity markets.

The proposed Phase II Demand Response M&V Standards add more specificity to existing definitions and business practice standards in the following areas: meter data reporting deadline, advanced notification, telemetry interval, meter accuracy for after-the-fact metering, meter data reporting interval, and adjustment window. FERC requests comment on whether the DR M&V standards are set forth with sufficient specificity and also whether greater consistency between regions should be encouraged.

The proposed EE standards are designed to create a standard method for quantifying the energy reductions from energy efficiency measures. The EE M&V Standards "include six new definitions and 63 business practice standards. Included are definitions for energy efficiency baseline and demand reduction value. The standards contain criteria for the use of energy efficiency products in organized wholesale electricity markets, general measurement and verification plan requirements, and detailed criteria of acceptable measurement and verification methodologies."

Comments on the NOPR are due sixty days after publication in the Federal Register.