JPMorgan Chase & Co. doesn't have the right to block a power plant renovation in Southern California a project the state says is needed to avoid possible blackouts this summer, federal energy regulators ruled Friday.
The Federal Energy Regulatory Commission issued an order in favor of the California Independent System Operator, which runs the state's electricity grid.
State officials said the energy-trading arm of JPMorgan was blocking a reconfiguring of two power plants in Huntington Beach. The plants at the center of the dispute are owned by AES, a power generator from Arlington, Va. AES is willing to renovate them, as requested by the state. But JPMorgan has a marketing contract with AES that it said gave it the right to veto the work.
The standoff stemmed from the shutdown of the San Onofre nuclear plant, which created the need for additional power sources.
In a protest filed with FERC, JPMorgan argued the state was "trying to interfere in a private contractual relationship." Company officials could not be reached Friday.
State officials, including Gov. Jerry Brown, had joined the ISO in its protest.
The ISO has been fighting with JPMorgan for more than a year. It has accused the bank of using improper bidding tactics to extract $73 million in excessive profits from California's power market. The company denies the charge, but FERC recently slapped it with a six-month, nationwide energy trading suspension for giving investigators false information.