By Zack Colman - 12/06/12 02:58 PM EST
The chief federal electricity regulator said penalties his office has dished out show it will “go after anybody.”
Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff said recent multimillion-dollar fines imposed against JPMorgan and Barclays for alleged power market manipulation could become more frequent.
Barclays said it would fight the $470 million fine FERC slapped it with in October for alleged market manipulation. FERC also sued JPMorgan in July on similar charges, and proposed a $435 million fine.
Wellinghoff said FERC’s actions have widespread support, “from especially the Hill and the people up here who believe we’re doing our job.”
Congress gave FERC the authority to go after power market manipulators in the Energy Policy Act of 2005, in hopes of preventing another Enron-type situation.
Enron was able to manipulate California’s power markets shortly after they deregulated in the early 2000s. Enron had encouraged power suppliers to shut down generation to create an artificial supply crunch, which allowed Enron and other traders to offer spot-market electricity at higher prices amid persistent rolling blackouts.
Wellinghoff said FERC’s enforcement office is just now starting to get the personnel it needs to launch manipulation charges. He said FERC is drawing from data from the past several years to build its cases.
Wall Street has pushed back against FERC’s actions, saying that the regulator is trying to bar financial firms from energy markets.
Wellinghoff said that is not the case.
“We’re an equal-opportunity enforcer. We’ll go after anybody who we believe is engaged in an activity that is inappropriate or is in violation of the statute,” Wellinghoff said. “That’s why Congress gave us that authority to actually have some teeth in the law to be able to police the industry and police the markets.”