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The African American Chamber of Commerce of Western Pennsylvania and the Hispanic Chamber of Commerce in Western Pennsylvania have entered a partnership with the Department of Energy’s (DOE) National Energy Technology Laboratory (NETL) and the DOE Office of Economic Impact and Diversity to design and create a program that promotes access to energy commodity trading for women and minority owned businesses.
A typical problem of most small businesses is that credit needs may far exceed their credit resources in attempting to execute transactions involving large volumes of product. The Funds Transfer Agent Agreement (FTAA) is a tool designed to overcome this major obstacle for women/minority owned businesses desiring to participate in the energy commodity (natural gas) marketplace. The design of the FTAA ensures the transfer of funds to the appropriate recipients, through the use of an intermediary such as a bank. In addition, the creditworthiness of the end-user and their commitment to placing the payment for the commodity in a blocked account relieves the small business of the need to secure a letter of credit or provide bond to the natural gas supplier.
See graphic above: A natural gas contract that includes a FTAA involves a Marketer, a Supplier, a Purchaser, and a Financial Institution. The Marketer signs a FTAA with the Financial Institution. The FTAA provides that the Financial Institution will act as the Marketer’s Funds Transfer Agent. The Marketer incorporates the FTAA in the purchase contract with the Supplier and the sales contract with the Purchaser. The Financial Institution acts as an intermediary, handling payment from the Purchaser to the Supplier through a “blocked” account in the Marketer’s name. (This does not constitute an extension of credit by the Financial Institution to the Marketer.) Title to the gas is immediately transferred from Supplier, to the Marketer, to the Purchaser. The Financial Institution ensures that funds are directed to the proper parties, eliminating the Marketer’s requirement to provide a letter of credit or payment bond to the Supplier.[/vc_column_text][vc_row_inner][vc_column_inner][vc_empty_space height=”25px”][vc_separator color=”custom” accent_color=”#f9d27a”][vc_empty_space height=”25px”][/vc_column_inner][/vc_row_inner][vc_row_inner][vc_column_inner width=”1/2″][/vc_column_inner][vc_column_inner width=”1/2″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row]
