Barclays sued by California utility over alleged electric market manipulation
(Reuters) - A California water utility filed a class action lawsuit on Tuesday to recoup losses in the electric market that it blames on Barclays Bank Plc [BARCR.UL], which the U.S. government fined $453 million in 2013 for manipulating electricity prices.
The lawsuit was filed by Merced Irrigation District, a state-recognized utility that oversees generation and distribution of electricity in Merced County, California.
The utility alleges that the British bank, part of Barclays Plc (BARC.L: Quote), through its energy traders, entered into contracts that "unreasonably restrained the markets for trading electricity and electricity-related contracts."
Barclays was not immediately available to comment on Tuesday but in the past has denied it manipulated electricity rates and appealed the government fine.
The filing said that the bank acquired and maintained monopoly power over the setting of daily index prices for four major western U.S. trading hubs between Nov. 1, 2006 and Dec. 31, 2008. The alleged manipulation cost market participants at least $139.3 million, the filing said.
The lawsuit comes after the U.S. Federal Energy Regulatory Commission (FERC) accused the bank and four of its traders of manipulating the electric market and in 2013 fined the company $453 million.
It had authorized Barclays to sell power at market-based prices in 2004.
Barclays was one of several banks that withdrew from dealing in commodity markets last year, including U.S. and European power, amid heightened regulation and reduced margins.
The bank recently plead guilty to manipulating foreign exchange rates by rigging the London interbank offered rate, or Libor.
(Reporting by Lehar Maan and Shivam Srivastav in Bengaluru; Editing by Lisa Shumaker)
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