Accused by federal regulators of manipulating electricity prices, JPMorgan Chase settled its case and agreed to pay $410 million in penalties.
The Federal Energy Regulatory Commission (FERC) approved the settlement for allegations of market manipulation, stemming from the company’s bidding activities in electricity markets in California and the Midwest from September 2010 through November 2012.
JPMorganChase will pay a civil penalty of $285 million to the US Treasury and return $125 million in unjust profits: $124 million to go to ratepayers in the California Independent System Operator (California ISO), and $1 million to go to ratepayers in the Midcontinent Independent System Operator (MISO). JPMorganChase also agreed to conduct a comprehensive assessment by outside counsel of its policies and practices in the power business.
The case stemmed from multiple referrals to FERC from the California ISO and MISO market monitors in 2011 and 2012 regarding the company’s bidding practices. The case by FERC accused the company of making bids designed to create artificial conditions that forced the ISOs to pay JPMorganChase outside the market at premium rates and for defrauding the ISOs by obtaining payments for benefits that the company did not deliver beyond the routine provision of energy.
JPMorgan said in a written statement that it’s “pleased to have reached an agreement with FERC to put this matter behind it.” The company did not admit or deny any violations.
MISO covers Manitoba and all or part of 15 states: Michigan, Minnesota, Wisconsin, Iowa, Missouri, Illinois, Indiana, Kentucky, North Dakota, South Dakota, Montana, Texas, Louisiana, Arkansas and Mississippi.