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• FERC suggested in court documents a year ago that bidding practices in JPMorgan's commodities trading business "may have been designed to manipulate" the markets.
• The alleged conduct was brought to FERC's attention in 2011 by the California Independent System Operator, the agency that runs the state's power grid.
• JPMorgan said Friday that is considering selling off part of its physical commodities business, which includes metals as well as energy. The company said the possibility of new regulations was one of the factors behind the decision to look at a potential sale or partnership. Big Wall Street banks like JPMorgan are facing increased scrutiny of their involvement in businesses that store and transport commodities such as oil and aluminum. A Senate committee held a hearing last week into whether banks should be allowed to control power plants, warehouses and oil refineries.
• FERC, an independent agency that regulates the interstate transmission of electricity, oil and natural gas, gained expanded authority to monitor possible manipulation of energy markets as a result of the Enron scandal in 2001. Market abuses by Enron and other trading firms resulted in rolling blackouts throughout California during the summer of that year. FERC was empowered to impose fines of as much as $1 million per violation per day, compared with the previous limit of $10,000 per violation.
• The states that are served by the Midcontinent Independent System Operator are Michigan, Minnesota, Wisconsin, Iowa, Missouri, Illinois, Indiana, Kentucky, North Dakota, South Dakota, Montana, Texas, Louisiana, Arkansas and Mississippi.
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