---------------------- Forwarded by Elizabeth Sager/HOU/ECT on 02/28/2000 
10:10 AM ---------------------------


"Andy Katz" <AKatz@eei.org> on 02/28/2000 07:42:53 AM
Please respond to "Wholesale Electric Contract Standardization Group" 
<contract@ls.eei.org>
To: "Wholesale Electric Contract Standardization Group" <contract@ls.eei.org>
cc:  (bcc: Elizabeth Sager/HOU/ECT)
Subject: Fwd: CFTC



Paul Pantano clarified my earlier email about the CFTC proposal.  Sorry for 
the confusion.

Andrew S. Katz, Senior Attorney
Edison Electric Institute
701 Pennsylvania Avenue, N.W.
Washington, D.C.  20004
Voice:  202-508-5616
Fax:     202-508-5673
e-mail:  akatz@eei.org

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From: ppantano@mwe.com
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Date: Mon, 28 Feb 2000 08:25:13 -0500
Subject: CFTC
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Dear Andy:

     I want to clarify a misunderstanding in your email to the group.  While 
it
is correct that the CFTC proposes to regulate commodities with exhaustible and
nearly inexhaustible supplies differently, it has not characterized power as
having an inexhaustible supply.  In fact, I would expect the CFTC to treat 
power
as having a finite supply at any given time.  This means, for example, that
power derivatives traded on a multilateral transaction execution facility 
would
not qualify for exemption from the Commodity Exchange Act under the current
proposal.  I think the EEI and other industry groups should consider 
attempting
to persuade the CFTC to exempt physical and derivative power contracts from
certain provisions of the CEA under the CFTC's proposal to consider exemptions
on a "case-by-case basis."  See, for example, the discussion of DTFs on pages 
9
and 10 of the proposal.  I hope this clarifies the CFTC's proposal.

     Regards, Paul

Paul J. Pantano, Jr.
McDermott, Will & Emery
(202) 756-8026

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