On May 10, 2016, the US Commodity Futures Trading Commission (CFTC) issued a proposed amendment to its 2013 RTO/ISO Order1 that would effectively restore private rights of action against grid operators to electric market participants. In addition to stating that the proposed amendment is a clarification, the CFTC argues that section 22 of the Commodity Exchange Act (the provision of the CEA that established such a right):
- Should apply consistently to all RTOs and ISOs;
- Is an important instrument in protecting the American public; and
- Is an integral component of the CEA’s remedial and enforcement scheme.
In an emphatic and strongly worded dissent, CFTC Commissioner J. Christopher Giancarlo noted that the proposed amendment, by relying on the CFTC’s acknowledged silence regarding section 22 in the RTO/ISO Order, would reintroduce legal uncertainty to participants in an already heavily regulated market. He further noted that, even absent such private rights of action, the CFTC could still seek restitution on behalf of affected market participants and that these participants may bring complaints before the Federal Energy Regulatory Commission (FERC) for violations of the Federal Power Act (FPA). Commissioner Giancarlo’s dissent also noted that excluding section 22 rights of action was consistent with Congressionally directed harmonization of the CEA and the FPA and the goal thereof to minimize conflicting or duplicative regulation by the CFTC and the FERC under their respective statutory authorities.1 Discussed in our related Legal Update.