Energy traders and utilities are split over which agency, if any, should regulate over-the-counter derivatives, according to industry sources close to negotiations. In a January 6 speech to the Council on Foreign Relations, Commodities Futures Trading Commission chair Gary Gensler continued to urge that his agency be the one regulating derivatives and reform. Futures (which are a form of derivatives) are now regulated by the Commodities Futures Trading Commission. Yet those derivatives have an unregulated side--over-the-counter. Energy traders use them to blunt risks. “I believe that over-the-counter derivatives were at the heart of the [2008 financial] crisis,” Gensler stated. Both agencies have been involved in Congressional hearings on the issue the last few months. A third agency, the Federal Energy Regulatory Commission, recently began trying to carve out its own regulatory position in trading, according to sources. FERC is looking to regulate transmission grid operators, like the California Independent System Operator, that run their own wholesale markets. There’s been discussion in Congress and in regulatory agencies that energy trades should be exempted from regulation, and that only financial institutions should be regulated. There has yet to be clarity on those issues in the last few months.