Federal energy regulators continued their crackdown on manipulation of California's energy market, ordering a Florida firm to pay a fine of $2.5 million and disgorge unjust profits of $911,553 plus interest.
On Monday, the Federal Energy Regulatory Commission approved a settlement with Florida energy company Gila River Power, a subsidiary of Entegra Power Group, to pay the fine and penalties.
The agreement marked the first time a market participant has admitted to a violation of the federal commission's anti-manipulation rule in an energy trading case, the commission said.
Gila River admitted to transactions between July 2009 and October 2010 to manipulate prices in markets operated by the California Independent System Operator, the state's power grid. It also admitted to violating regulations by the federal commission requiring accurate submissions to the California ISO, the commission said.
Gila River sold power to California generated from its 2,200-megawatt power plant southwest of Phoenix. The commission ordered the California ISO to allocate the disgorged funds and interest to benefit electric ratepayers.
In recent weeks, millions of dollars in penalties have been slapped on some of the world's biggest banks, including JPMorgan Chase & Co., by U.S. regulators.
The commission didn't always wield such muscle. Its authority expanded after the California power crisis of 2000-01, when Enron Corp. traders' actions triggered rolling blackouts. In 2005, Congress enacted a sweeping energy law that gave the commission the ability to go after fraud and manipulation. The law also gave it the authority to impose fines as high as $1 million a day for those who tamper with electric-grid reliability.
Within the last month, the commission, acting on recommendations from a 200-person enforcement unit assembled in the last three years, proposed fines on Barclays and Deutsche Bank for manipulating energy trades.
Last week the commission took action against J.P. Morgan Ventures Energy Corp. in connection with its dealings with the California ISO. It revoked the firm's right to trade power for six months next year — the first such sanction for an active market participant.
Separately, the California ISO complained to the commission last week alleging that the JPMorgan unit, which controls electric generators in Huntington Beach, is using its stake to block changes to plants that will be needed by the state next year. The grid operator is seeking the commission's permission to move ahead with the project by removing JPMorgan's right to object to the changes.
Times staff writers contributed to this report.