Weakness in Calif. electricity trading exposed

AP News
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Posted: Jul 30, 2012 10:40 AM

FOLSOM, Calif. (AP) — California officials say a big electricity trader has apparently figured out a way to exploit vulnerabilities in the state's $8 billion-a-year electricity market, just as Enron Corp. did a decade ago.

The Sacramento Bee (http://sacb.ee/QraIh4 ) reports authorities are investigating a subsidiary of the New York investment bank JPMorgan Chase & Co., which may have grabbed an extra $73 million during 2010 and 2011.

The California Independent System Operator, the Folsom-based agency that runs the state's power grid and oversees last-minute electricity sales, has recovered $20 million from the company so far.

The Federal Energy Regulatory Commission is investigating on California's behalf, and the fate of the remaining $53 million claimed by the ISO isn't clear.

The investigation became public when the commission sued JPMorgan.

The company denies any wrongdoing.

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Information from: The Sacramento Bee, http://www.sacbee.com