On June 24, APGA Government Affairs Director, Nate Hill delivered remarks to Atmos Energy Marketing customers, including several public gas systems, at a workshop put on by the company in Franklin, Tennessee. Hill gave an update on federal issues that could impact utilities in the future including legislation in Congress and activities undertaken by federal agencies such as the Environmental Protection Agency (EPA), Commodity Futures Trading Commission (CFTC) and others. 

Hill explained that Congress and the Administration are making a last ditch effort to enact energy legislation that could potentially include language that places a price on greenhouse gas emissions. In response to the Deepwater Horizon oil spill in the Gulf of Mexico, the President is making a strong push on Congress to enact energy and climate legislation. Some are speculating that Congress may attempt to attach energy or climate change legislation to any bill that moves through the Senate to address the Gulf of Mexico oil spill. The House of Representatives passed a bill in June 2009 that regulates GHG emissions via a cap-and-trade scheme. The Senate has yet to act but leaders are plotting to push forward in July with energy and potentially climate change legislation.    

The EPA continues to act through rulemakings to put in place a foundation for eventual carbon regulation. The agency put in finalized a rule last year that requires utilities to have a greenhouse gas monitoring plan in place by March 2011 and submit data to EPA. Further, the agency made official its authority to regulate emissions unilaterally by enacting the “endangerment finding,” which states the ghg emissions are a threat to human health and welfare and subject to regulation under the Clean Air Act.

Hill’s told the audience that APGA’s efforts to shape the financial reform legislation had bore fruit as both the Senate and House versions of the bill included exemptions for public gas systems hedging transactions from a mandatory clearing provision. Many members of Congress were adamant that all over-the-counter (OTC) transactions be cleared, exchange-traded or somehow backed by cash held in a margin account. APGA argued for months that public gas systems use their credit rating and the OTC market for hedging purposes only and their transactions pose no systemic risk to the U.S. financial system. Both the House and Senate agreed and exempted public gas system transactions from the clearing mandate. 

If you have questions on this article please contact Nate Hill at 202-464-2742 or nhill@apga.org. 

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