No compromise from Feinstein on energy bill

Californian Democrat Senator Dianne Feinstein and Texan Republican Senator Phil Gramm have failed to reach a compromise over Feinstein’s proposed energy bill, which could give the Commodity Futures Trading Commission (CFTC) authority on over-the-counter (OTC) energy derivatives.

Feinstein is lobbying to repeal key provisions of the Commodity Exchange Act, which exempts the OTC energy market from federal regulation, in the wake of Enron’s collapse.

Feinstein has reportedly rejected a request from Gramm, the top-ranking Republican on the Senate Banking Committee, to exempt metals derivatives and to drop price-transparency requirements from her proposed reforms.

Gramm hoped Feinstein would concede other areas in her proposed energy bill. Specifically, Gramm opposes Feinstein’s suggestion for introducing capital requirements for online trading platforms. He is also averse to forcing electronic exchanges to publicly disclose more trade-related information.

Federal Reserve chairman Alan Greenspan and US Treasury Secretary Paul O'Neill also oppose Feinstein’s plans.

The International Swaps and Derivatives Association, and other trade associations, are also urging the Senate to vote against the proposals, noting that Feinstein’s amendments unfairly apply to OTC metals derivatives, which have no connection to either the Enron collapse or the Californian energy crisis.