CFTC Staff Letter 14-18: No-Action Relief for Southwest Power Pool and Participants

U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
Facsimile: (202) 418-5521 www.cftc.gov a
CFTC Letter No. 14-18
No-Action
Division of Clearing and Risk
Division of Market Oversight
Division of Swap Dealer and Intermediary Oversight Nicholas A. Brown, President and Chief Executive Officer Southwest Power Pool, Inc. 201 Worthen Drive Little Rock, Arkansas 72223-4936 Re: No-Action Relief with Respect to Certain Commodity Exchange Act Provisions That May Apply to Southwest Power Pool, Inc. and/or Its Participants Dear Mr. Brown:
This is in response to your letter dated October 7, 2013 (“No-Action Request Letter”),1 to the Division of Market Oversight, Division of Swap Dealer and Intermediary Oversight, and the Division of Clearing and Risk (“Divisions”) of the Commodity Futures Trading Commission (“Commission”). In the No-Action Request Letter, you request that the Divisions confirm that they will not recommend that the Commission take enforcement action against Southwest Power Pool, Inc. (“Southwest Power Pool”) and its market participants with respect to contracts, agreements and transactions for the purchase or sale of certain electric energy products (as discussed below) for failure to comply with certain provisions of the Commodity Exchange Act (“CEA” or “Act”) and the implementing regulations thereunder (“Commission regulations”), as applicable. Statement of Facts Southwest Power Pool is a Regional Transmission Organization (“RTO”) approved by the Federal Energy Regulatory Commission (“FERC”). On October 1, 2013, Southwest Power Pool submitted an exemption application (“Exemption Application”)2 to the Commission requesting that the Commission exercise its authority under section 4(c)(6) of the CEA3 and section 712(f)(4) of the Dodd-Frank Wall Street Reform and Consumer Protection