FERC Increases Scrutiny of JPMorgan’s Power Sector Ties Amid Concerns Over Private Equity Affiliations

The Federal Energy Regulatory Commission (FERC) has decided to increase scrutiny of JPMorgan power sector actions after finding link to private equity firm IIF US Holding 2, the owner of El Paso Electric, gas-fired power plants totaling close to 5 GW and other energy assets. The decision will trigger higher reporting requirements and scrutiny for J.P. Morgan Investment, an affiliate of private equity firms Infrastructure Investments Fund, and will trigger further reporting requirements. Public Citizen, a consumer watchdog group, has asked the Federal Reserve to investigate whether JPMorgan Chase violated the Bank Holding Company Act and the Volker Rule by owning non-banking related assets and operating a private equity company. Thursday’s decision follows FERC’s October 2021 finding that Evergy, a utility company, and Bluescape Energy Partners, an investment firm, were affiliated companies, and FERC is finding affiliations even if the 10% ownership threshold isn’t reached. In its decision, FERC said an investment advisory agreement and the partnership agreement governing the relationship between IIFUS Holding 2 and JP.Morgan Investment, respectively, show there is likely to be an absence of arm’s length bargaining between these companies.