May 10 U.S. federal energy regulators on Friday
granted a rehearing request for 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 decision Friday follows the U.S. Federal Energy
Regulatory Commission's (FERC) decision on Thursday to give
itself more time to decide the bank's rehearing request.
As part of its decision on Friday, FERC said the bank should
submit another compliance filing that caps its offers to supply
energy and other services at cost in markets outside of
FERC however rejected the bank's proposal to add 10 percent
to its offers.
The regulator said by supplying power and other services at
cost, JPMorgan should avoid losing money on its sales, while
also preventing the bank's units from displacing more cost
effective resources, which was a concern for the operators of
the PJM and Midcontinent power grids.
PJM operates the power grid serving more than 60 million in
13 Mid-Atlantic and Midwest states and the District of Columbia.
Midcontinent Independent System Operator (MISO) operates the
power grid in 11 Midwest states.
FERC sanctioned the U.S. bank's energy trading unit on Nov.
14 for failing to disclose information during an investigation
of potential power market manipulation in California and
That six month trading ban started on April 1.
FERC has not accused the bank of market manipulation but
JPMorgan this week notified its shareholders in a regulatory
filing that the agency may take action against the bank.
JPMorgan has denied that it manipulated the power markets,
and vows to fight.
Separately, JPMorgan sold the rights to market electricity
from three power plants in California, reducing its presence in