FERC takes more time on JPMorgan power rehearing request
May 9 (Reuters) - U.S. federal energy regulators on Thursday gave themselves more time to consider a request for a rehearing by a unit of JPMorgan Chase & Co Inc on how the bank will comply with a six-month ban on physical power trading at market-based rates.
The U.S. Federal Energy Regulatory Commission (FERC) on Nov. 14 sanctioned the U.S. bank's energy trading unit for failing to disclose information during an investigation of potential power market manipulation in California and Michigan.
The six month trading ban started on April 1.
FERC has not accused the bank of any market manipulation and does not disclose investigations, but it is still likely looking into the case, analysts have said.
Following the disclosure last week of a 70-page government document that alleged wrongdoing by the bank, however, energy analysts said it is more likely than not that FERC will charge the bank with manipulating the market.
On Jan. 30, JPMorgan filed its plan with FERC on how it would comply with the six-month ban. The bank's plan included two parts - compliance in the area controlled by the California Independent System Operator (ISO) and compliance in the rest of the country.
The California ISO operates the power grid in much of California and parts of Nevada.
On March 19, the FERC commissioners issued an order rejecting some and accepting some of JPMorgan's compliance plan.
On March 29, JPMorgan resubmitted its plan to comply with the trading ban.
PJM Interconnection LLC, which operates the PJM power grid, and the market monitors for PJM and the Midcontinent ISO (MISO), formerly known as the Midwest ISO, protested JPMorgan's March 29 compliance filing.
In its filing, JPMorgan said it wants to submit offers for physical power in PJM and MISO at zero dollars but receive the higher of market price or cost. The market price in PJM and MISO is known as Locational Marginal Price, or LMP.
PJM and the market monitors said this would give the bank an advantage over other power marketers, who if they bid zero can only get the market price, which at times can be below their actual cost of production.
PJM operates the power grid serving more than 60 million in 13 Mid-Atlantic and Midwest states and the District of Columbia.
MISO operates the power grid in 11 Midwest states.
In the order on Thursday, the FERC Commissioners gave themselves more time to decide on JPMorgan's rehearing request of their March 19 order.