If you are a regular reader of The Power Line, you will have heard many comments about how electricity traders and investment banks are the real interests pushing huge new interstate transmission lines so they can trade electricity coast to coast in ever increasing amounts.
Here’s why — corruption and market manipulation.
The Financial Times reported yesterday that the Staff of the Federal Energy Regulatory Commission (FECR) was investigating a number of electric power marketing affiliates owned by major banks — including JP Morgan Chase, Barclays, Deutsche Bank AG, and others, on charges of manipulating electricity prices. Immediately, reporters starting wondering whether this is like Enron’s antics back in the early 2000s, which ripped off California consumers and decimated California’s flawed electricity markets.
The blog post that I have linked to is written by a former staffer at an independent market monitor who worked with energy trading markets. He appears to know his stuff. Remember what PJM’s market monitor said about PJM’s capacity auctions: “They are gameable.” It looks like FERC is investigating more games.