JP Morgan Chase wants to settle for $500 million in a FERC case where the bank was accused of manipulating electricity markets in multiple state. If the company wants to settle for $500 million, how many billions did they make on the scheme?
This is what the nationwide übergrid and deregulation have produced – electricity manipulation from coast to coast.
For the energy regulator, it would be the latest in a string of actions against big banks. On Tuesday, FERC ordered Barclays to pay a $470 million penalty for suspected manipulation of energy markets in California and other Western states by some of its traders. The bank is fighting the charges.
JPMorgan faces similar allegations stemming from its rights to sell electricity from power plants in California and Michigan. In the aftermath of the 2008 financial crisis, it became a losing business that relied on “inefficient” and outdated technology, or as JPMorgan called it, “an unprofitable asset.”
Under “pressure to generate large profits,” FERC’s investigators said in the March document, traders in Houston devised a workaround. Adopting eight different “schemes” between September 2010 and June 2011, the traders offered the energy at prices “calculated to falsely appear attractive” to state energy authorities. The effort prompted authorities in California and Michigan to dole out about $83 million in “excessive” payments to JPMorgan, the investigators said.
“Any such improper payments to generators are ultimately borne by the households, businesses and government entities that are the end consumers of electricity,” FERC said.
Yeah, and we thought deregulation was about saving consumers money.