MLGW Assistant Manager of Energy Resources Laura Campbell testified Tuesday before the Federal Commodity Futures Trading Commission (CFTC) on the need for greater transparency in the natural gas futures market. MLGW uses the natural gas futures market to protect its customers from sharp increases in the price of natural gas. Campbell testified on behalf of the American Public Gas Association (APGA), which represents 700 public, not-for-profit gas distribution systems in the United States.
"Natural gas is a lifeblood of our economy and millions of consumers depend on natural gas every day to meet their daily needs. It is critical that the price those consumers are paying for natural gas comes about through the operation of a fair, orderly and transparent marketplace,� Campbell said. �The natural gas market has grown in size and complexity in recent years. Transparency is the prudent means to insure the market price is an accurate reflection of supply and demand forces."
In her testimony, Campbell told the committee that additional transparency is critical since futures activities have a great influence on the cost of natural gas.
�APGA�s members have lost confidence that the prices for natural gas in the futures and the economically linked over-the-counter markets are an accurate reflection of supply and demand conditions for natural gas,� Campbell told the committee. �APGA believes that there are immediate measures that the commission can, and should, take within its existing authorities to improve the current situation. APGA strongly supports the market trust act of 2007. This bi-partisan legislation would protect consumers by requiring the reporting of large positions in financial contracts for natural gas held in all segments of the market.�
Campbell also testified that APGA supports amendments to Rule 18.05, which would require natural gas futures wholesalers to increase their transparency in transactions by reporting the wholesale trader�s position in the marketplace.
MLGW Interim Chief Utility Officer Jerry Collins is hopeful that the testimony will help to keep natural gas costs as low as possible for MLGW customers.
"At MLGW we do everything possible to ensure that our customers pay low and stable costs for natural gas. Laura's selection by the APGA to represent the entire industry is a testament to the quality and integrity of the personnel in our Energy Resources group. We hope that Laura's testimony will cause the CFTC to put in place a level of oversight regarding natural gas trading that will translate into lower and more stable natural gas pricing for our customers," Collins said.
About CFTC: Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The CFTC's mission is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.
MLGW is the largest three-service public power utility in the nation, serving more than 420,000 customers in Memphis and Shelby County. A 2007 survey of large metropolitan areas showed that MLGW has the sixth lowest combined rates in the nation.