June 10 JPMorgan Chase and Co Inc and
other power traders that benefited from a flaw in the California
electricity market rules from 2009 through 2011 will need to
reimburse $52 million in excess profits, U.S. regulators said
The ruling from the Federal Energy Regulatory Commission
(FERC) marks a victory for the Californian grid operator, and
comes as JPMorgan may face more serious charges related to power
market manipulation in California and Michigan.
The California Independent System Operator (ISO), which
operates the state's power system, changed its market rules in
2011 to cut off the loophole that the grid operator said the
bank used to disrupt the power market.
June 2013 - FERC approves California ISO request to force power
sellers, including JPMorgan, to reimburse $16.7 million to
California electricity distributors for disruptive bidding
practices between April 2009 and March 2011. FERC also
signed-off on the $35.3 million reimbursement the ISO already
forced the sellers to pay in April 2011.
May 2013 - JPMorgan reduces presence in California power market,
selling the right to market electricity from three power plants.
May 2013 - JPMorgan tells shareholders FERC may take action
against bank for certain power market bidding activities.
May 2013 - An internal FERC document leaked to the New York
Times says the regulator may charge JPMorgan with power market
manipulation. The document also says JPMorgan's commodities
chief, Blythe Masters, may have made "false and misleading
statements," to the regulator under oath.
April 2013 - JPMorgan six-month ban on selling power at market
based rates starts.
Jan 2013 - FERC appeals magistrate's November 2012 ruling
blocking FERC from seeing JPMorgan emails.
Nov 2012 - Federal magistrate rules that JPMorgan does not need
to hand over emails FERC sought in July 2012 as part of the
regulator's power market manipulation investigation.
Nov 2012 - FERC suspends JPMorgan's authority to sell power at
market based rates for six months for making factual
misrepresentations during an investigation into market
manipulation. The ban is to start in April 2013.
Sep 2012 - FERC directs JPMorgan to show why regulators should
not suspend its authority to sell power at market rates, after
it says the bank submitted misleading information to the
Commission during the market manipulation investigation.
July 2012 - FERC subpoenas JPMorgan in federal court to provide
emails as part of its investigation into market manipulation in
California and the Midwest. This is when JPMorgan is publicly
named as the party that allegedly manipulated the California
June 2012 - California ISO asks FERC to approve its plan to
force power sellers to reimburse money earned from exploitive
bidding practices to electricity distributors from April 2009 to
March 2011. The ISO had already forced power sellers to
reimburse $35.3 million in April 2011 for the period between
August 2010 and March 2011.
Feb-June 2012 - California ISO imposes a non-public $486,000
penalty against JPMorgan in February for failing to submit all
information the grid operator sought as part of its
investigation. JPMorgan appeals the penalty in March and FERC in
April rejected the bank's appeal.
JPMorgan filed a complaint with FERC in May that the fine
was unjust, but withdrew its complaint in June after the FERC
Office of Enforcement said the bank and its lawyers were not
adequately responding to numerous requests for information from
the ISO and FERC.
May 2011 - FERC approves California ISO's request to fix flaw in
the bidding mechanism, effective March 26, 2011.
April 2011 - California ISO forces power sellers to reimburse
$35.3 million to electricity distributors from trades executed
from August 2010 to March 2011 due to effect of exploitive
March 2011 - California ISO informs JPMorgan the grid operator
reviewed the bank's bidding activities and intends to refer the
matter to the FERC Office of Enforcement, which was the start of
FERC's non-public investigation.
March 2011 - California ISO files with FERC to fix a loophole in
the power market bidding mechanism after a party's behavior
"aggravated the market impact of the flaw." That party was later
identified as JPMorgan.
2005 - FERC authorizes JPMorgan to sell power at market based