CFTC Proposal Reasserts Right To Private Litigation Against RTOs And ISOs

The CFTC proposed an amendment to a March 28,2013 Order that exempted specified electric energy transactions of six independent system operators ("ISOs") and regional transmission organizations ("RTOs") from virtually all provisions of the Commodity Exchange Act, except those prohibiting fraud and manipulation (the "RTO-ISO" Order). The proposed amendment clarifies that such entities are not exempt from the private right of action provision of Section 22 of the CEA.

The proposed amendment addresses the applicability of Section 22 that was raised in a federal court in February 2015. RTO-ISO Order of 2013 did not discuss the right of harmed parties to bring private actions under CEA Section 22 against RTOs and ISOs, and this silence was cited by the court for dismissing a private lawsuit. See Aspire Commodities, L.P. v. GDF Suez Energy N. Am., Inc., No. H-14-1111, 2015 WL 500482 (S.D. Tex. Feb. 3, 2015), affirmed No. 15-20125, 2016 WL 758689 (5th Cir. Feb. 25, 2016).