Scott Johnson Interviewed on FERC Fines for Minn. Electricity Firm
For its article “Minnesota firm fined for power market manipulation,” Minneapolis’ Star Tribune interviewed Akin Gump energy regulation, markets and enforcement practice associate Scott Johnson on electricity trading firm Twin Cities Power’s agreement to pay $4.3 million to settle market manipulation allegations by the Federal Energy Regulatory Commission (FERC).
The article notes that, in the past two years, FERC has initiated a dozen enforcement actions for electricity market manipulation. Johnson said that FERC is increasingly focusing on traders’ transactions in physical and derivative markets as targets for its investigations, noting, “It is difficult to say whether that apparent uptick is simply the result of an increased enforcement focus on the part of FERC or represents an actual increase in that type of behavior over time.”
In the Twin Cities Power case, the company admitted that its traders—whom it fired before the federal investigation began—manipulated the market through 2010. Johnson said that it is unusual for a company to admit a violation and even more so for individual traders to be sanctioned.