Seven natural gas and electricity trade groups Tuesday called on White House officials to pressure the Commodity Futures Trading Commission (CFTC) not to broadly define “swap dealer” in such a way as to include end-users and hedge funds, making them subject to regulation under the Dodd-Frank Wall Street Reform Act.

“We have consistently voiced our support for the overall intent of Dodd-Frank,” but “when it comes to the rulemaking process [at the CFTC], we remain extremely concerned that congressional intent is being ignored, or even circumvented, resulting in end-users being miscast by the CFTC as ‘swap dealers,'” wrote the Independent Petroleum Association of America, American Gas Association, Natural Gas Supply Association (NGSA), Edison Electric Institute, Electric Power Supply Association, American Public Power Association and the National Rural Electric Cooperative Association.

“Currently the CFTC’s proposed swap dealer rule is overly broad and would result in commercial end-users who use swaps to hedge their commercial risk and reduce price volatility for their customers being misclassified as swap dealers,” the groups said (see Daily GPI, Dec. 2. 2010).

And “the signals that we have received from the CFTC lead us to believe that the draft final rule has taken an even more negative turn than the proposed rule from the end-users’ perspective. Further we are concerned that our public responses to the proposed rule have not been given due consideration by the Commission…We write you…with a sense of urgency as the rule is expected to become final later this month,” according to the letter to White House Chief of Staff Jacob J. Lew, the National Economic Council’s Gene Sperling and the Office of Management and Budget’s Cass R. Sunstein.

“We strongly urge you to voice you concerns about the proposed swap dealer rule to the CFTC and ensure that our members and consumers are not collateral damage from an overly broad and restrictive rule.”

Last Thursday the NGSA joined the the National Corn Growers Association in writing a letter to the White House expressing their concern about the CFTC’s move toward a sweeping definition for swap dealer (see Daily GPI, Feb. 13).

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