Mike Enzi: “I believe the amendment is overly broad and, if adopted, will likely decrease market liquidity because of increased…”

“I believe the amendment is overly broad and, if adopted, will likely decrease market liquidity because of increased legal and transactional uncertainties. Additionally, energy companies may be discouraged from using derivatives to hedge price risks, resulting in increased volatility in the energy markets. In the end, I believe this will hurt the very consumers the legislation seeks to help. The amendment appears to grant the Federal Energy Regulatory Commission primary jurisdiction over energy derivatives, but if the Federal Energy Regulatory Commission determines that the derivative or financial instrument is not under its jurisdiction, then the Federal Energy Regulatory Commission should refer the derivative or financial instrument to the appropriate Federal regulator. Unfortunately, this will create great uncertainty for market participants as to which agency's regulatory scheme the derivative would fall under. I recently was involved in some pipeline questions and ran into the circular path of fingerpointing where each agency said the other agency and the other agency and the other agency was responsible until it pointed back to the first agency, and nobody would look at the problem. That is the kind of circular problem we are creating with this amendment. In addition, it goes without saying that Federal agencies want to expand their jurisdiction and get bigger.”