The Exchange has cleared more than $1.5 billion worth of OTC deals through November 1, equivalent to 441.1 trillion British thermal units of natural gas and 152,800 megawatt hours of electricity. Open interest, as of the end of the day on November 1, is valued at approximately $838 million and covers natural gas transactions at the Henry Hub, the principal pricing point for the U.S. natural gas industry, and seven principal basis pricing points in the United States - Chicago city gate, Houston Ship Channel, Northwest Pipeline Rockies, Panhandle Eastern Pipe Line Co. Texas-Oklahoma main line, San Juan Basin, Southern California, and Transco Zone 6 New York, as well as electricity transactions at the Pennsylvania/New Jersey/Maryland (PJM) regional power hub, which serves 23 million customers in an area from northern New Jersey to south of Washington, D.C. The open interest is equivalent to 262.3 trillion Btus of natural gas and 34,400 megawatt hours of electricity.
Exchange President J. Robert Collins, Jr., said, "The rapid and continued growth of cleared OTC transactions, its growing open interest, and the widening geographic scope of that business is an affirmation of the financial integrity of the Exchange clearinghouse which serves as a shield against the risk of counterparty default."
OTC clearing, introduced by the Exchange on May 31, allows energy market participants the flexibility of negotiating their own deals and submitting them to the Exchange clearinghouse. The Exchange also nets the positions of cleared OTC and Exchange transactions to determine margin rates reducing costs and improving cash flow. In order to participate, market participants must have an account with an Exchange clearing member firm.
