Navigating the electricity industry is not as simple as the flip of a switch. It’s big business as the people of El Paso are about to find out.
The city’s electricity provider is in talks to be purchased by an investment fund with intertwining ties to JPMorgan Chase. The problem? JPMorgan Chase has previously been fined $400 million by the Federal Energy Regulatory Commission for manipulating energy markets.
“One of the ways you get charged with manipulating the energy markets is by having inside information. The kind of inside information that comes from owning an electric utility and parts of the grid,” he says.
Dayen says that due to laws and regulations put in place by the Federal Reserve, there is nothing illegal about a bank purchasing a public utility. But there is still worry surrounding the intentions of this purchase.
“Part of the fear,” Dayen says “is that when you merge financial and commercial energies together it becomes a giant power relationship where information can be traded and used in ways that benefit large financial interests at the expense of the public.”
What you’ll hear in this segment:
– What multiple issues are problematic about this purchase
– What connection the owners of the investment fund and its employees have to JPMorgan
– How this purchase happened, even after JPMorgan was fined
Written by Kristen Cabrera.
Correction: This piece originally stated the sale of El Paso Electric had occurred. It has been updated to reflect the sale is pending.