Deutsche Traders Defend Wholesale Electricity Capitalism

By Published On: November 16, 2012

Deutsche Bank Energy Trading declared there was no “fraud” in profiting from the wholesale energy market in California in a Nov. 5 Federal Energy Regulatory Commission filing. The traders state unapologetically they intended to make money on the market, and denied that transactions were “manipulation.” Deutsche Bank adds that if it’s penalized, markets in general will be harmed. Federal regulators ordered Deutsche Bank to offer proof of why they shouldn’t enforce a $1.6 million penalty. Congestion rights were held by Deutsche Bank in 2010. By trading at two different points on the grid, Deutsche Bank “saw arbitrage opportunities--the chance to buy low and sell high,” according to the filing. “The California [Independent System Operator] cannot comment on the specific details of FERC’s Deutsche Bank investigation at this time.  FERC’s Office of Enforcement has preliminarily determined that Deutsche Bank violated rules prohibiting market manipulation and the submission of false or inaccurate information,” stated the grid operator.

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