The House of Representatives Wednesday passed by an overwhelming margin a conference report on the nearly $300 billion farm bill that contains a provision to close the so-called “Enron Loophole,” which for years has exempted large electronic trading platforms from the oversight of the Commodity Futures Trading Commission (CFTC).

The House vote was 318-106. House and Senate conferees adopted the the report last week, including the CFTC-related provision that was offered by Sens. Dianne Feinstein (D-CA), Carl Levin (D-MI) and Olympia Snowe (R-ME). The provision was part of the of the CFTC Reauthorization Act of 2008, which was folded into the mammoth farm bill (see Daily GPI, May 9).

The measure would eliminate the “Enron Loophole” to the Commodity Exchange Act, which has enabled electronic energy trading platforms to skirt full CFTC oversight. It would bring leading energy trading platforms, such as Atlanta-based IntercontinentalExchange, under the same regulation as the New York Mercantile Exchange.

Specifically, the bill would boost federal oversight authority to detect and prevent manipulation and limit speculation in U.S. electronic energy markets. It would increase transparency, create an audit trail, impose firm speculation limits and establish stiff financial penalties in cases of market manipulation and excessive speculation.

The next stop for the farm bill conference report is the Senate, which is expected to vote on it Thursday. President Bush has threatened to veto the measure when it arrives at his desk. But congressional Republicans, many of whom support the farm legislation, aren’t likely to uphold a presidential veto in an election year, Capitol Hill observers say.

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