Dec 5 U.S. federal energy regulators on
Wednesday dismissed a complaint by the energy trading arm of
JPMorgan Chase & Co against California's power grid
operator for energy generated in the second quarter of 2012.
J.P. Morgan Ventures Energy Corp, the JPMorgan unit, filed
the complaint with the U.S. Federal Energy Regulatory Commission
(FERC) against the California Independent System Operator
(California ISO), on Sept. 14, 2012, alleging the state's grid
operator violated its tariff by underpaying JP Morgan about $3.7
This dispute is a side issue to FERC's recent decision to
temporarily suspend JP Morgan's market based rate authority to
trade physical power for six months starting April 2013, which
regulators imposed due to the bank's alleged factual
misrepresentations during an investigation into market
manipulation in the California ISO.
JP Morgan said in the dismissed complaint that it generated
energy pursuant to the California ISO's exceptional dispatch
The instructions enable the California ISO to commit
resources that are not cleared through normal market procedures
in order to maintain reliable grid operations under unusual
circumstances, like the loss of excessive amounts of generation
or transmission facilities.
In most cases of exceptional dispatch, the California ISO
pays the generator a premium for the power produced. JP Morgan
alleged in its complaint that it did not receive the required
JP Morgan and its subsidiary BE CA LLC control through
tolling agreements 10 generating units in the California ISO
market. JP Morgan alleged that between April 2012 and June 2012,
the California ISO exceptionally dispatched its units 18 times.
Tolling agreements are like rental agreements - the bank
rents the plants from their owners and operates the facilities.