Electric utilities urge prudent reform

Increased transparency in the OTC derivatives markets is a goal supported by the US power industry, but it’s imperative that increased regulation doesn’t push up the cost of hedging and cause higher or more volatile electricity prices, writes Richard McMahon of the EEI

The US electric power industry supports the calls from the Obama Administration and Congress to improve transparency and stability in over-the-counter (OTC) derivatives markets. But it is essential that policy makers preserve the ability of electric utilities to use these markets to manage risks and insulate their customers and investors from commodity price volatility.

The electric power industry