Following up on its legal claim that JP Morgan manipulated the California Independent System Operator\u2019s market, the Federal Energy Regulatory Commission July 13 protested the investment institution\u2019s refusal to release subpoenaed communications. JP Morgan lawyers\u2019 maintain that emails sought by the commission\u2019s office of enforcement are protected as legally privileged documents. In a July 17 filing with the U.S. District Court for the District of Columbia, federal regulators called those claims \u201cdeficient on their face.\u201d \u201cFERC should take the additional step of permanently revoking J.P. Morgan Ventures Energy Corp.\u2019s market-based rate authority and send a shockwave across the entire industry that market manipulation will not be tolerated,\u201d Tyson Slocum, Public Citizen\u2019s Energy Program director, stated July 19. Last August, federal regulators launched a private investigation into JP Morgan\u2019s bidding practices. Regulators allege the practices inflated the cost of power in the California and Midwest grid operator markets. The exercise of market power in the California grid operator\u2019s \u201cbid cost recovery mechanism\u201d allegedly cost it an excess $100,000 a day, according to a commission filing. CAISO claimed a total $57 million of improper payments for settlement corrections. As part of its investigation, the commission directed JP Morgan to produce several documents as part of its investigation. The financial institution produced redacted documents, claiming they were protected by the attorney-client privilege. On July 2, the commission filed suit in the federal court alleging JP Morgan Ventures Energy Corp. may have manipulated the California grid operator\u2019s \u201cmake whole payments\u201d pricing. \u201cAny such improper payments to generators are ultimately borne by the households, businesses, and government entities that are the end consumers of electricity,\u201d the commission stated. It demanded JP Morgan turn over pertinent documents. On July 5, the judge ordered JP Morgan to \u201cpresent declarations or other competent evidence to support each of the essential elements of any claimed privilege.\u201d FERC argued this week that JP Morgan\u2019s ongoing claims of attorney-client privilege on documents being sought were not between a lawyer and client, and \u201care the same as those it improperly made about unprivileged documents.\u201d The agency also contends the trader\u2019s attorneys \u201cfailed to submit competent evidence about essential elements of its claims, and that the privilege claims now before the Court are inconsistent with controlling law.\u201d JP Morgan July 16 categorized the commission\u2019s legal understanding of document privilege as being \u201ca cramped theory of attorney-client privilege that is without precedent or support.\u201d Some early emails said be privileged legal communications were later revealed to be non-legal exchanges. JP Morgan submitted the emails at issue July 16 for the court\u2019s review of privileged content. \u201cBecause of the ongoing investigation of potential manipulation and communications violations related to the California ISO market, we are not allowed to provide details at this time,\u201d stated Steven Greenlee, grid operator spokesperson.