Texas blackouts may bring winterization mandates from FERC, shape federal spending priorities
Jasmin Melvin, 24 March 2021
New York — Policy activity on grid resilience has seen an uptick in the month since an Arctic blast left millions of Texans without power for days, and the federal policy response could bring new requirements for generator winterization and inform stimulus and infrastructure spending priorities, a Washington insider said March 24.
The federal response starts with the Federal Energy Regulatory Commission, Jeff Dennis, managing director and general counsel for Advanced Energy Economy, said during an AEE-hosted webinar on the policy fallout from the Texas blackouts. Continue reading “Article: Texas blackouts may bring winterization mandates from FERC, shape federal spending priorities”
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”
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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FERC probes JPMorgan over electricity charges
SF Gate, 3 July 2012
JPMorgan Chase & Co. is being investigated over potential power-market manipulation that inflated payments for electricity, according to the U.S. Federal Energy Regulatory Commission.
FERC, which has pledged to combat manipulation of prices, began its probe after reports last year of bidding practices by JPMorgan that were deemed abusive by California and Midwest grid operators, according to documents provided by the agency.
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United States: Open-Market Manipulation Under SEC Rule 10b-5 And Its Analogues: Inappropriate Distinctions, Judicial Disagreement And Case Study: FERC’s Anti- Manipulation Rule
Maxwell K. Multer, 01 September 2011
Regulators have addressed market manipulation with Rule 10b-5 since its promulgation under the Securities Exchange Act in 1942. While Section 9 of the Securities Exchange Act addresses manipulation of securities prices, it requires the specific intent “for the purpose of inducing the purchase or sale of such security by others”1 or “for the purpose of creating a false or misleading appearance [of market activity] . . ..”2 It is likely for that reason that prosecutors rarely use Section 9, choosing instead to bring manipulation proceedings under Rule 10b-5.3 But as the tools available for accomplishing market manipulation have evolved, the judicially narrowed contours of Rule 10b-5 may be such that certain new schemes escape liability. With modern advances in trade execution, market platforms and derivatives, it is now possible to accomplish a profitable market manipulation without engaging in any overtly fraudulent or illegal behavior.
Several courts have elected to distinguish between these alleged schemes and schemes which do include illegal behavior, employing a higher level of scrutiny and requiring proof of additional elements in the former situation. Manipulative schemes are referred to as “open market manipulations” when the alleged scheme is accomplished solely through the use of facially legitimate open market transactions. That is, where the manipulator has not engaged in any conduct that is inherently or otherwise illegal, such as fictitious transactions, wash sales or by disseminating false reporting. The transactions are seemingly legitimate, but for their manipulative intent and effect in combination. Continue reading “Article: United States: Open-Market Manipulation Under SEC Rule 10b-5 And Its Analogues: Inappropriate Distinctions, Judicial Disagreement And Case Study: FERC’s Anti- Manipulation Rule”