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Futures, Swaps, Derivatives Escape Filing Requirement

Fortnightly Magazine - February 1 1997

The Idaho Public Utilities Commission (PUC) has ruled that electricity futures contracts or other types of "derivatives" or risk management instruments (e.g., options, forward contracts, swaps, etc.) do not fall subject to certain state regulations that exact fees and require PUC approval for security issues by utilities.

It distinguished the two categories: risk management instruments aim to shelter utilities from losses, while security issues usually provide a source of funding. Utilities, it said, need not file a confidential copy of its risk management plan with the commission. Re Idaho Power Co., Case No. IPC-E-96-19, Order No. 26710, Dec. 4, 1996 (Idaho P.U.C.). t

Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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