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WASHINGTON, Nov 19 (Reuters) - The U.S. Federal Energy Regulatory Commission (FERC) on Monday said it approved a settlement with Gila River Power LLC for manipulation of power markets in California in 2009 and 2010.
The settlement calls for Gila River, a subsidiary of Entegra Power Group LLC, to pay a fine of $2.5 million. In addition, unjust profits of $911,553 plus interest will be returned and allocated to affected electric ratepayers.
FERC said the agreement marked the first time that a market participant has admitted to a violation of FERC's anti-manipulation rule in an energy trading case.
Gila River admitted to using "wheeling-through" transactions between July 2009 and October 2010 to manipulate prices in markets operated by the California Independent System Operator (ISO), so that it would receive a higher price on a higher quantity of energy imports.
"The company's trading strategy moved the price of power at import nodes, including Palo Verde," FERC said.
It also admitted to violating FERC regulations requiring accurate submissions to the California ISO.