Barclays feels force of energy regulator The news that Barclays is about to be fined in the US for allegedly inappropriate trading in power markets highlights the tougher approach being taken by regulators, a decade after the collapse of energy trader Enron. JPMorgan, Constellation Energy and Deutsche Bank are also among the companies that have been caught in the tighter regulatory net of the US electricity market. The tougher stance comes as support is growing for stricter oversight of commodities markets from US lawmakers, prompted by large price swings over the past five years. In the clearest example of this new approach, the US Federal Energy Regulatory Commission agreed this year to a record $245m settlement with Constellation Energy for alleged manipulation of the country's power markets. The settlement contrasts with fines totalling just $127m in the previous five years, in spite of new rules introduced in 2005 that gave Ferc the power to impose penalties of up to $1m a day on companies found to have manipulated US energy markets. "Understand that the [Federal Energy Regulatory] Commission will be vigorous in using its anti-manipulation authority to protect consumers," said Jon Wellinghoff, Ferc chairman, in a statement after the regulator unveiled the fine on Constellation. Wholesale electricity, particularly regional markets supplying smaller consumers, has faced tougher scrutiny by Washington since the California energy crisis of 2000-01, when Enron and other traders were accused of rigging supplies and causing huge blackouts. In addition to tougher financial penalties, Ferc has increased its market surveillance, opening a new division dedicated to monitoring the multibillion-dollar markets for electricity and natural gas in the US. Carlos Blanco, an expert on energy regulation at the Oxford Princeton Programme, said in a recent article that the creation of the new market surveillance division and the record fine suggested participants in the US energy market were facing a "new world." "Ferc is strengthening its monitoring efforts and pursuing more aggressively any perceived wrongdoing by gas and power market participants," he wrote. The more aggressive approach has resulted in 11 probes into potential manipulation of the country's power market since January 2011, including around the activities of JPMorgan, Barclays and Deutsche Bank. In December, Ferc said Deutsche Bank's energy trading business might have engaged in manipulation of the California power market between January 2010 and March 2010. Ferc has also subpoenaed JPMorgan Chase twice this year as it investigates whether the bank manipulated power markets in California. The investigation into Barclays and four former traders is also part of the crackdown. The regulator alleges the bank and the traders bought and sold electricity in enough volume to move exchange prices up or down to benefit parallel positions in the derivatives market. The bank on Wednesday said that Ferc was investigating its "power trading in the western US with respect to the period from late 2006 through 2008," warning that it could be fined. The bank, in a statement, said it intended to "vigorously defend" its trading activities. However, some lawmakers say regulators are not doing enough to enforce openness in the energy markets. The US Commodity Futures Trading Commission, which polices the commodities derivatives market, launched a nationwide investigation into the oil markets in 2007, but since then has filed only two cases of attempted manipulation. In a notorious case that followed the CFTC probe, it last year charged Parnon Energy, a US oil trader, together with its Swiss and UK affiliates Arcadia Energy (Suisse) and Arcadia Petroleum, with manipulating oil prices in 2008 by amassing dominant positions in the physical market that created the impression of a shortage, profiting more than $50m in the process. Arcadia has denied any wrongdoing.