JP Morgan power trading ban won't affect existing contracts-FERC
Feb 1 (Reuters) - JP Morgan Chase & Co's six-month power trading ban will not affect existing contracts the bank has already sold, the Federal Energy Regulatory Commission said in a filing on Friday.
The investment bank had asked FERC to clarify whether the ban on selling electricity at market-based rates in some U.S. markets, which is due to start on April 1, would apply to electricity contracts it has already sold for that period.
"Where the Commission has previously suspended a seller's market-based rate authority upon finding or presuming that a seller has market power," FERC said, "the contractual obligations entered into by the seller prior to the suspension have remained in effect."
In the six months from April 1, JP Morgan will only be allowed to make physical electricity sales at cost. Market-based rate authority allows a company to trade power at whatever price the market will bear.
FERC imposed the suspension on JP Morgan Ventures Energy Corp's, the bank's power trading arm, back in November, saying it had failed to disclose information in an investigation into market manipulation.
FERC has not accused the U.S. bank of market manipulation. JP Morgan has said it will fight the sanction.
A JP Morgan spokeswoman declined to comment on the FERC ruling on Friday.
FERC is currently debating whether to grant the bank a rehearing.