FERC Levies $1.5 Million Fine on Power Marketer

DB Energy Trading LLC will pay a $1.5 million civil penalty, and disgorge $172,000 plus interest, to resolve a FERC show cause proceeding regarding manipulation of California power markets.

DB Energy Trading LLC is an indirect, wholly-owned subsidiary of Deutsche Bank AG.

According to a FERC news release: "Enforcement staff determined that between January 29, 2010, and March 24, 2010, Deutsche Bank violated the Commission's anti-manipulation rule by engaging in a scheme in which Deutsche Bank entered into physical transactions to benefit its financial position, its Congestion Revenue Rights (CRR) position at the Silver Peak intertie. As stipulated by Deutsche Bank, its 'physical exports at Silver Peak raised prices at Silver Peak and caused its CRR position to gain value.' Enforcement concluded that Deutsche Bank's physical transactions were not consistent with market fundamentals, but instead were undertaken with the intent to change the value of CRRs. Deutsche Bank stipulated that the physical transactions lost money on each day they were traded."

According to a FERC news release: "The investigation further determined that Deutsche Bank violated Commission regulations requiring companies with market-based rate authority to provide accurate information. A majority of Deutsche Bank's transactions at the Silver Peak intertie were designated as Wheeling-Through Transactions without meeting California ISO's tariff requirements for such transactions. Enforcement determined that these false designations violated the Commission's regulation requiring the submission of information to ISOs"