By Scott DiSavino
May 10 JPMorgan Chase & Co has sold the
rights to market electricity from three power plants in
California, reducing the bank's presence in a state where it is
being probed for allegations of manipulating prices.
Federal energy regulators may take enforcement action against
JPMorgan, the bank said in a regulatory filing this week. The
bank has denied the allegations that it manipulated power prices
in California and Michigan, and vows to fight.
A spokeswoman at JPMorgan said the company declined to
comment on the sale of the power marketing rights to Southern
California Edison, a regional power company.
California utility regulators on Thursday approved the plan
to transfer so-called tolling agreements of the three power
plants, which can produce enough power for about 3 million
homes, to Southern California Edison (SCE) from Oct. 1, 2013 to
May 31, 2018.
SCE, a unit of Edison International, serves about
4.9 million customers in southern and central California.
Tolling agreements usually allow companies like JPMorgan to
purchase gas and sell the power produced from the facilities.
The three plants are owned and operated by units of U.S.
power company AES Corp.
The sale included tolling agreements for 3,690 megawatts
(MW) at Units 1-6 at the Alamitos plant (1,950 MW), Units 1 and
2 at Huntington Beach (430 MW) and Units 5-8 at Redondo Beach
JPMorgan, which does not list the power plants it operates
in the United States, declined to comment on whether they will
own other tolling agreements at power plants in California after
The California Public Utilities Commission and SCE did not
disclose the cost of the contracts.
SAN ONOFRE OUTAGE
The shutdown of a nuclear power plant in California has also
put JPMorgan into a dispute with California over a key component
of the state's plan to keep the lights on this summer.
The two reactors at SCE's 2,150-MW San Onofre nuclear power
plant shut in January 2012 due to problems with their new steam
To help maintain the reliability of the power grid should
both reactors remain shut over the summer, the California
Independent System Operator (ISO) entered into an agreement with
AES to convert Huntington Beach Units 3 and 4 into so-called
Synchronous condensers provide voltage support to help move
power around the grid.
The California ISO operates the power grid in most of
California and part of Nevada.
The agreement with AES however was contingent upon the
consent of JPMorgan, which has a tolling agreement for
Huntington Beach 3 and 4.
JPMorgan has claimed consent rights with respect to
Huntington Beach 3 and 4 even though the U.S. Federal Energy
Regulatory Commission (FERC) in January said the bank does not
have the contractual right to prevent AES from building the
synchronous condenser units.
JPMorgan sought review of the FERC order in February but
agreed to transfer its alleged consent rights with respect to
Huntington Beach 3 and 4 to SCE as part of the sale approved on