July 30, 2013 in Business

JPMorgan accused of power price scheme

Associated Press
 

WASHINGTON – U.S. energy regulators are accusing JPMorgan Chase & Co. of manipulating electricity prices in California and the Midwest in 2010 and 2011.

The Federal Energy Regulatory Commission said in an enforcement notice Monday that the bank used improper bidding strategies to squeeze excessive payments from the agencies that run the power grids in California and the Midwest.

JPMorgan has reportedly been in negotiations with the regulator to reach a settlement over the allegations. The agency recently levied a $453 million fine on Barclays, Britain’s second-largest bank, for manipulating electricity prices in California and other Western states. Barclays is disputing the allegations.

The notice could be a prelude to a settlement with New York-based JPMorgan, which is the largest U.S. bank.

JPMorgan spokesman Brian Marchiony declined to comment.

FERC’s enforcement staff said its investigation had found improper trading practices were used at the company’s Houston-based subsidiary, JPMorgan Ventures Energy Corp.

The alleged conduct was brought to FERC’s attention in 2011 by the California Independent System Operator, the agency that runs the state’s power grid.

FERC, an independent agency that regulates the interstate transmission of electricity, oil and natural gas, gained expanded authority to monitor possible manipulation of energy markets as a result of the Enron scandal in 2001.

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