Tesseract
30th July 2013, 00:47
I'm posting the CNN link as they actually have a short explanation of what went down:
The strategies allegedly worked like this. In California, for example, the bank would bid to deliver electricity to a utility the next day at a low price of $30 per megawatt hour. When the next day came, JPMorgan would change its offer to a much higher price of $999 per megawatt hour, assuring the power did not get bought, according to the notice.
California ISO, the state's power-grid operator, would then have to compensate the bank for the cost of making the bid, under California's "make whole provision," which requires ratepayers to cover certain costs incurred by energy sellers.
Although this is tantamount to theft from the energy consumer, or a welfare rort for banks, it is believed the bank will get way with just a $500m fine.
http://money.cnn.com/2013/07/29/news/companies/jp-morgan-electricity/index.html?iid=HP_LN
The strategies allegedly worked like this. In California, for example, the bank would bid to deliver electricity to a utility the next day at a low price of $30 per megawatt hour. When the next day came, JPMorgan would change its offer to a much higher price of $999 per megawatt hour, assuring the power did not get bought, according to the notice.
California ISO, the state's power-grid operator, would then have to compensate the bank for the cost of making the bid, under California's "make whole provision," which requires ratepayers to cover certain costs incurred by energy sellers.
Although this is tantamount to theft from the energy consumer, or a welfare rort for banks, it is believed the bank will get way with just a $500m fine.
http://money.cnn.com/2013/07/29/news/companies/jp-morgan-electricity/index.html?iid=HP_LN