Considering that San Onofre nuclear energy is almost certain to be absent again next summer, JPMorgan’s attempt to block renovations at a power plant in Southern California was bound to engender another round of jousting with regulators.

Last Friday, the Federal Energy Regulatory Commission (FERC) ordered the energy-trading arm of JPMorgan Chase & Co. to cooperate with the state’s main electricity grid operator and let AES, the owner of a power plant in Huntington Beach, do the renovations it has already agreed to do.

JPMorgan Ventures Energy Corp. insisted it could block the renovation because of a marketing contract it has with AES to sell power from two units at the plant. And it took its argument―that the California Independent System Operator (ISO) was interfering in a “private contractual relationship”―to FERC in November.    

ISO told FERC in a December filing that JPMorgan was trying “to exercise anticompetitive control over resources needed to avoid the risk of blackouts for thousands of homes and businesses, as well as critical public infrastructure, in Southern California.”

It was joined in its argument by California two U.S. Senators, Governor Jerry Brown, the California Energy Commission and the state Air Resources Board.

FERC ruled that “JP Morgan’s consent is not required.”

JPMorgan and the state’s grid operator have been grappling for more than a year. The ISO accused the bank of improperly manipulating energy prices to the tune of $73 million and then claimed that the company “made factual misrepresentations and omitted material information” during months of investigation.

FERC agreed with the state and suspended JPMorgan from trading in the California Energy Market for six months, beginning in April. 

–Ken Broder            

To Learn More:

Feds Rule JPMorgan Can’t Block California Power Plant Changes (by Mary Lynne Vellinga, Sacramento Bee)

JPMorgan Loses Tussle over Huntington Beach Power Station (by Marc Lifsher, Los Angeles Times)

JP Morgan in Power Market Standoff amid Nuclear Outage (by Morgan Lee, U-T San Diego)

Order on Petition for Declaratory Judgment (Federal Energy Regulatory Commission) (pdf)

JPMorgan Suspended from Trading in California Energy Market, but Has 5 Months to Get Out (by Ken Broder, AllGov California)