Changes to Dodd-Frank Bill Should Help Energy Suppliers and End Users

By February 22, 2012 News

The House Agriculture Committee passed several important changes to the Dodd-Frank Wall Street reform bill several weeks ago that will provide more clarity to suppliers and end users of energy. The original bill contained provisions that would have brought substantial new regulations on suppliers of energy such as electricity, natural gas and others, and potentially even on large end users of energy. The original bill was designed to more heavily regulate financial transactions known as swaps that are often used to hedge commercial risks such as fluctuating energy prices or interest rates, but are also used by financial institutions to speculate. Subjecting energy companies and large end users of energy to the bill’s rigorous oversight provisions would have added a significant layer of cost to energy prices, potentially forcing some to consider paying the extra costs to engage in active risk management or to simply take the risk of buying energy at spot market prices. The changes should prove positive for end users of energy.