Article: FERC Issues Settlement Order Reaffirming “Gaming” Prohibition in Power Markets

Article - Media, Publications

FERC Issues Settlement Order Reaffirming “Gaming” Prohibition in Power Markets

Michael Brooks, Robert (Bob) Pease, 30 October 2020

Last week the Federal Energy Regulatory Commission (FERC) issued an Order Approving Stipulation and Consent Agreement involving High Desert Power Project, LLC (High Desert) and Middle River Power LLC. (Middle River) to resolve allegations of market manipulation in the California Independent System Operator (CAISO) market.

The settlement is noteworthy because it involved allegations of market manipulation that were completely absent of any attempt to influence market prices or to send false signals to the market. This instead is one of the purest examples of FERC taking the position that its market manipulation rule prohibits taking advantage of market design or commitment/dispatch errors (i.e., “gaming”) even when the market is put on notice of the issue. The order should serve as a warning to anybody thinking the current Commission may not embrace this broad theory of manipulation. Continue reading “Article: FERC Issues Settlement Order Reaffirming “Gaming” Prohibition in Power Markets”

Article: JPMorgan Agrees to $410 Million Fine for Electricity Market Manipulation

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JPMorgan Agrees to $410 Million Fine for Electricity Market Manipulation

ENERGY SOLUTIONS FORUM, 13 August 2013

JPMorgan Chase & Co. has accepted a $410 million penalty to settle accusations of electricity market manipulations in California and the Midwest.

On July 30, 2013, the Federal Energy Regulatory Commission (FERC) issued an order approving stipulation and consent agreement that requires JPMorgan Ventures Energy Corporation (JPMVEC) to settle allegations of electricity market manipulation in California and the Midwest between September 2010 and November 2012. The $410M fine includes $285M in civil penalty (to be paid to the U.S. Treasury) and $125M of disgorged profits ($124M to California ratepayers, and $1M to Midwest ratepayers). The agreement also requires JPMVEC to waive claims for additional payments from California Independent System Operator Corporation (CAISO) and adopt additional compliance measures. JPMVEC, a subsidiary of JPMorgan Chase & Co., accepted the settlement facts without admittance or denial of violations.

FERC initiated investigations in response to multiple referrals by CAISO and Midwest Independent Transmission System Operator, Inc. (MISO) market monitors of manipulative bidding practices during 2011 and 2012. It approved four emergency tariff filings from both independent system operators (ISOs) to make tariff changes effective from the filing date rather than the order date. In November 2012, FERC suspended JPMVEC’s electric market-based rate authority for six months with effect from April 1, 2013 for submitting false information.

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