JPMorgan in US power market probe The US electricity regulator has subpoenaed JPMorgan Chase twice in the past three months as it investigates whether the bank manipulated power markets in California and the Midwest region, court filings showed. The Federal Energy Regulatory Commission revealed the probe in court papers filed on Monday that said the bank's bidding practices may have inflated electricity costs by at least $73m. Wholesale electricity has attracted heightened regulatory attention since the California energy crisis of 2000-01, when Enron and other traders were accused of rigging supplies and causing blackouts. FERC has in the past year alleged Barclays and Deutsche Bank manipulated electricity markets and has compelled Constellation Energy to pay $245m to settle another case. Barclays and Deutsche declined to comment. The disclosure comes as JPMorgan is already under intense scrutiny by authorities since its shock disclosure in May of more than $2bn in trading losses related to credit derivatives positions. The electricity investigation involves whether JPMorgan's bidding strategies extracted "inflated" or "excessive" payments from two wholesale power markets serving California and several Midwest states. The bank's commodities business owns or has rights to output from several electric generators. "Any such improper payments to generators are ultimately borne by the households, businesses and government entities that are the end consumers of electricity," FERC attorney Thomas Olson wrote in papers filed on Monday in a US federal court. FERC declined to comment further. JPMorgan mentioned the investigation in its latest quarterly financial report but provided few details. In a statement JPMorgan said that as noted in the report, "we have been responding to an FERC investigation into certain activities in our federally approved power business." The bank added: "We stress that this investigation is ongoing and that no conclusions have been reached or findings adjudicated. " FERC began the formal investigation in August 2011 after the California and Midwest grid operators alerted the government to strategies the operators "viewed as abusive," according to one court filing. In California, these strategies may have artificially increased "bid cost recovery" payments, in which the grid operator makes generators whole for the costs of bidding into the market, according to the FERC order authorising the investigation. The legal documents filed this week also push into public view legal manoeuvring between government and JPMorgan attorneys as the commission seeks 25 emails that the bank argues are privileged. In a March 2011 email included in the filings, Francis Dunleavy, head of principal investments in the bank's global commodities group, wrote to Blythe Masters, head of the group, that he would handle one regulatory inquiry "but it may not be pretty." JPMorgan said: "We welcome the court's assistance in resolving this dispute over documents."