BREAK IN TRANSCRIPT
Mr. LaMALFA Madam Speaker, I yield myself as much time as I may consume.
Madam Speaker, the premise of the heavily bipartisan Public Power Risk Management Act is simple and is one that all Members of the House should support. It seeks to keep electricity and natural gas rates from increasing for over 47 million Americans. Those 47 million Americans are customers of over 2,000 publicly owned utilities who have used swaps to manage their risk for years.
Unfortunately, the Dodd-Frank Act, though well-intentioned and enacted to make reforms to our Nation's financial industry, has been used to limit who can do business with a publicly owned utility.
For example, in my district specifically, the city of Redding, California, the Redding Electric Utility has been concerned that potential limitations to hedging options in the future could increase the costs to their customers, as well as Grays Harbor Public Utility District, a community-owned nonprofit utility that serves 45,000 customers in Washington State, which previously had 20 counterparties whom they could use to help manage their risk, says Doug Streeter, its chief financial officer. Now, instead of 20, it is down to just two counterparties due to overly restrictive rules born out of, I think, an unintentional consequence of the Dodd-Frank Act.
``What we're hearing from the counterparties is it's abundantly clear that they're worth more to us than we are to them,'' Mr. Streeter says. ``It wasn't a big book of business for them, and it's just not worth it for them to be designated as a swap dealer. They're not willing to take that on, so they've left the market,'' continued Mr. Streeter.
Of course, this unintended consequence is affecting utilities in congressional districts all across the United States. The results of this limitation are fewer options for publicly owned utilities to manage their risks, which will translate into higher costs for millions of American ratepayers.
I was not yet a Member of this body when Dodd-Frank was debated, but I think it's safe to say that at no point during the debate was it contemplated that Dodd-Frank could lead to higher energy rates for millions of Americans, which is an unacceptable result during a period of tremendous economic uncertainty. This potential outcome can be prevented by sending H.R. 1038 to the Senate today with a strong bipartisan vote.
I should note that while my bill seeks to preserve a publicly owned utility's access to cost-effective and customized nonfinancial commodity swaps used to generate electricity or produce natural gas, it still requires financial swaps to be governed by the new CFTC rules issued under the Dodd-Frank Act and requires reporting of all transactions to the CFTC to ensure market integrity.
I should also note that my bill has broad bipartisan support from many Members all over the country from both sides of the aisle, for which we're very thankful, as well as broad support by key stakeholders, including the Consumer Federation of America and the United States Chamber of Commerce, of which I will include their letters in the Record.
Let's stick up for these utilities and their customers. They're simply trying to manage their risk so that they can keep rates low for millions of Americans.
With that, I reserve the balance of my time.
BREAK IN TRANSCRIPT
Mr. LaMALFA Madam Speaker, I appreciate again how we have been able to come together in such a good bipartisan fashion. I greatly appreciate my colleague from Georgia's kind and helpful words in moving this legislation today on the floor.
In closing, again, H.R. 1038 seeks to keep electricity and natural gas bills affordable for over 47 million Americans. Our publicly owned utilities should have access to the risk management tools that they need to keep costs down, a goal we all share, and which prevents utility rates from rising. I ask my colleagues to support this commonsense legislation.
I yield back the balance of my time.
BREAK IN TRANSCRIPT