Statement of Chairman Timothy Massad on the Southwest Power Pool Final Order and the Amended the RTO-ISO Order

October 18, 2016

I support this order, which comes after careful review of the issue, including comments from many market participants.

Our electric markets are subject to regulation by the Federal Energy Regulatory Commission (FERC) and state regulators. Those regulators work to ensure that energy rates remain reasonable, transmission systems function reliably, and the interests of market participants are balanced with the protection of electricity consumers. In light of this, the CFTC exempted certain transactions in the regional transmission organization (RTO) and independent system operator (ISO) markets from most provisions of the Commodity Exchange Act (CEA), other than our own authority to pursue fraud and manipulation in those markets.

One issue was left uncertain, which was whether private rights of action under the CEA could be brought against RTOs, ISOs, and other market participants. As a general matter, private rights of action are important to our regulatory structure. They can deter bad actors and protect market participants. But many market participants expressed concern that private actions could create costs within the markets in ways regulators did not anticipate. For example, several state consumer advocate offices noted that private rights of action could inadvertently introduce regulatory uncertainty and increase costs for consumers. So while private rights of action will remain critical overall in our markets, I am persuaded that, in this limited instance, they could cause instability and adversely affect consumers without necessarily enhancing supervision of markets or consumer protection.

In making this determination, it is important that the CFTC continues to retain the authority to pursue fraud and manipulation within those markets. Aggrieved market participants and consumers also still have the ability to file complaints with the CFTC and our Whistleblower program.

I thank the CFTC staff and my fellow Commissioners for their work on this matter, as well as those who took the time to provide us with feedback.

Last Updated: October 18, 2016