J.P. Morgan settles with FERC on energy market manipulation claims

FERC alleged that J.P. Morgan's bidding activities in the Midwestern and California energy markets from 2010 to 2012 constituted market manipulation

The Federal Energy Regulatory Commission (FERC) agreed to penalize J.P. Morgan Ventures Energy Corp. with $410 million in fees and restitution of unjust profits following FERC's allegations of energy market manipulation.

FERC alleged that J.P. Morgan's bidding activities in the Midwestern and California energy markets from 2010 to 2012 constituted market manipulation. A civil penalty of $285 million will be applied to JPMVEC. The penalty will be paid to the U.S. Treasury.

JPMVEC will also pay out $124 million in unjust profits to the ratepayers of the California Independent System Operator (Cal-ISO) system and another $1 million to ratepayers in the Midcontinent Independent System Operator (MISO), formerly known as the Midwest Independent System Operator.

FERC investigators had determined JPMVEC made bids designed to create artificial conditions that forced the ISOs to pay JPMVEC outside the market at premium rates, according to a release from FERC. Investigators determined JPMVEC engaged in 12 manipulative bidding strategies.

JPMVEC admits the facts set forth in the agreement but did not admit or deny the violations, according to FERC. The company agreed to waive claims for additional payments from California ISO relating to two of the 12 strategies under investigation and will conduct a comprehensive assessment by outside counsel of its policies and practices in the power business.

This story was originally posted at Power Engineering online. It is reposted here by permission.

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