Another electricity trader in California has been zapped by federal officials over the way it trades in the California power market.
Entegra Power Group agreed to pay a $2.5 million fine and cough up $911,553 in "unjust profits," the Federal Energy Regulatory Commission announced this week. The profits will be refunded to California ratepayers, FERC said.
While the case is relatively small, it marks the second time in a week that FERC has imposed sanctions on a power trader over its conduct in California.
Last week FERC imposed a six-month national trading suspension on JPMorgan Chase & Co. for giving investigators false information in a probe of JPMorgan's activities in California. FERC is investigating charges that JPMorgan used manipulative bidding practices to ring up $73 million in excess profits.
JPMorgan has acknowledged providing FERC with false information but denies any wrongdoing in its trades.
The Entegra case broke new ground of sorts. FERC spokeswoman Mary O'Driscoll said it's the first time a power trader has admitted violating the agency's anti-manipulation rules.
Those rules didn't exist before 2005. That's when Congress, reacting to the California energy crisis of 2000 and 2001, broadened FERC's oversight of trading activities. State officials had complained that FERC did very little to rescue California during the worst of the crisis.
The California Independent System Operator, the quasi-state agency that runs the power grid, welcomed the Entegra settlement and applauded the company "for taking responsibility for its actions."
The Entegra case involved trades made in 2009 and 2010. FERC said the Tampa, Fla., company employed phony trades to increase the price for power sold into Southern California from an Entegra plant near Phoenix.
"They were making kind of phantom trades," O'Driscoll said.
Company officials couldn't be reached for comment.
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