Once again, a power supplier has been accused of gaming California's electricity market.
The company, which state officials wouldn't identify, has allegedly reaped $10.5 million in "excessive gains" since April, according to the California Independent System Operator.
The ISO, which runs California's transmission grid, has blocked the company from continuing the behavior, said ISO spokeswoman Stephanie McCorkle. She said the ISO this week asked the Federal Energy Regulatory Commission to investigate the matter.
California has already accused JPMorgan Chase & Co. of garnering $73 million in extra profit through manipulative trading practices – a charge the company denies. The matter is pending before FERC.
But California officials insist the emergence of a second case doesn't mean they're seeing a rerun of 2000 and 2001, when power traders ran roughshod on the state's electricity market and rang up billions in excess profits.
"It is not indicative of a broader trend," said Jeff McDonald, the ISO's manager of market analysis and mitigation, in an interview Thursday. "This is really an isolated circumstance."
McCorkle, the spokeswoman, said the latest case involves a small, supplemental "sub-market" that becomes active when supplies are tight.
"We have over 100 market participants and we have just one testing the rules," she said. "We're stopping it at every corner, and we will continue to keep a watchful eye."
The price of wholesale electricity in California is set by market forces, but the market has strict rules on how companies are supposed to offer power for sale and at what prices.
In the latest case, McDonald said the company engaged in "economic withholding" of power. In short, the company occasionally kept electricity off the market improperly until it could command "exceptionally high prices," he said.
The ISO said it was forbidden by federal power rules from identifying the company. In the earlier case, JPMorgan's name became public after FERC sued the company in U.S. District Court to gain access to company emails.
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