The Gas and Electricity Marketing Committee (GEM) addresses cutting-edge legal issues facing the energy marketing and trading sector. Our members benefit from the participation of Specialist Vice Chairs who provide leadership and support in the following five subject-matter areas: (1) Standardized Energy Trading Contracts, (2) Energy Creditors’ Rights and Bankruptcy, (3) Financial and Energy Derivative Products and Trading, (4) Compliance and Enforcement, and (5) Policy and Legislation. Each of these subject-matter areas is described in turn below.

1. Standardized Energy Trading Contracts
• Lawyers serving clients in the energy marketing and trading sector are vitally interested in the issue of standardization. When energy products and commercial terms are standardized, trade liquidity and value are enhanced. Standardization also promotes transaction transparency by making required reports more accurate and comparable. GEM addresses issues including (a) the pros and cons of various terms and conditions often embedded in standardized energy contracts and definitions; (b) the status of various efforts to standardize physical energy trading terms, and improve industry risk mitigation through the widespread adoption of standard form documents; (c) the nuts and bolts of each of the major energy trading form agreements; and (d) the development of a master agreement for renewable energy certificates.
  
  
2. Energy Creditors’ Rights and Bankruptcy
• Lawyers serving clients in the energy marketing and trading sector frequently face critical issues involving energy-company bankruptcies. These lawyers are asked to provide bankruptcy-related counsel to power marketers, energy trading companies, electric cooperatives, investor-owned utilities, and industrial end-users. GEM addresses issues including (a) the application of bankruptcy law and principles to forward contracts, swap agreements, netting agreements, futures contracts, options, and tolling agreements; (b) means and methods to properly and lawfully liquidate, terminate, and value trading contracts and portfolios; (c) responding to counterparty defaults or terminations; (d) developing strategies for responding to margin/collateral calls and demands for adequate assurance; (e) upon bankruptcy, helping debtors to set priorities and protocols for responding to counterparties; and (f) bankruptcy litigation regarding the foregoing issues.
  
  
3. Financial and Energy Derivative Products and Trading
   • A major aspect of energy trading is risk price and position management and control. Lawyers working in this field counsel clients on a broad range of energy and commodity derivatives issues, including contracting, documentation, regulatory, tax consequences, and conflict resolution. GEM addresses issues including (a) analyzing and negotiating derivatives documentation including ISDA master agreements, credit support documentation, and cross-product and cross-affiliate master netting agreements; (b) advising clients on tax and disclosure implications of derivative transactions; (c) negotiating and potentially litigating the analysis and proper valuation of terminated derivative transactions; (d) the development of “model” documents and documentation policies for options, derivatives, and swaps in petroleum, natural gas, weather, emissions, and power; (e) evaluating and developing internal guidelines and controls for clients’ derivatives activities, and reviewing risk management policies related to their energy derivatives trading; and (e) counseling clients on the international regulation of futures and forward contracts.
     
     
4. Compliance and Enforcement
   • In 2005 Congress amended the Federal Power Act and Natural Gas Act, as part of the Energy Policy Act of 2005, to give the Federal Energy Regulatory Commission (FERC) expanded jurisdiction over energy traders, and broad authority to impose civil penalties and seek criminal penalties for violation of compliance programs and regulatory requirements. The foregoing rules, regulations, and enforcement authority apply not only to those who traditionally have been subject to FERC jurisdiction, but also to entities that participate in regulated markets or provide regulated services. In late 2005 the FERC adopted a Policy Statement on Enforcement under which it made clear that it can and will use its new $1,000,000/day per violation penalty authority when it finds violations of its requirements. Compliance with FERC requirements has become a major focus for energy marketing and trading companies. This focus has prompted a widespread rush to develop and implement enterprise-wide compliance programs and infrastructure. GEM supports and educates its members with regard to the major role that lawyers play in this process, updates its members on developments in the area of FERC enforcement and operational audits, and provides formal and informal guidance on topics of interest.
     
     
5. Policy and Legislation
   • Congress and federal agencies are continually involved in energy-related policy development, including matters that affect energy marketing and trading. GEM addresses policy matters including renewable energy certificates, renewable portfolio standards, emissions allowances, electricity transmission access and expansion, market manipulation, and using energy and capacity products to satisfy electricity reliability requirements.

Chair:
Lyle D. Larson

Vice Chairs:
Compliance & Enforcement
Kathleen E. Magruder

Emerging Markets, Products and Derivatives
Paul B. Turner

Membership and Outreach
Jeffery S. Dennis

Policy and Legislation
Dena Wiggins

Programs
Christopher R. Jones

Publications (Committee Newsletter & The Year in Review)
Joey Lee Miranda

Regional Organized Markets, East
David F. Hannan

Regional Organized Markets, Midwest
Jeffrey M. Gray

Regional Organized Markets, West
Seumas Lobban

Standardized Contracts
Melissa Lauderdale