FERC seeks $29 million from BP over natural gas trading
By Scott DiSavino
(Reuters) - U.S. federal energy regulators on Monday ordered BP Plc to respond to allegations of natural gas market manipulation in Texas, threatening the energy company with fines near $29 million.
The move likely sets up another major legal battle for the Federal Energy Regulatory Commission (FERC) as it steps up policing of power and natural gas markets.
In the order, FERC pointed to a two-minute recorded conversation between a BP trainee and a senior gas trader as evidence that BP bought and sold gas at a possible loss in the physical market in order to increase the value of BP's derivatives position.
BP said the recorded call was "taken out of context." The company will "vigorously defend against these allegations," spokesman Geoff Morrell said in a statement. He said the charges were "without merit" and that BP stood by public statements issued in February 2011 that maintained that the gas traders did not engage in market manipulation.
The commission said BP has 30 days to pay the fine or contest the order.
FERC has another contentious legal case brewing with Barclays Plc, which last month vowed to fight a $470 million fine for allegedly manipulating California power markets.
JPMorgan Chase & Co settled a separate case for $410 million last week.
FERC first notified BP that it was investigating the company's trading in the Houston natural gas market about two years ago. FERC is seeking penalties of $28 million and the return of $800,000 in profits, plus interest, it said on Monday. Continued...