Dynegy to Settle Futures Probe for $5 Million
Dynegy Inc. agreed Thursday to pay $5 million to settle a regulatory investigation into fake trades reported to industry publications.
The company agreed to pay the fine without admitting or denying the findings of the Commodity Futures Trading Commission, which concluded that Dynegy submitted false information to skew natural gas and electricity prices in its favor.
Separately, the General Accounting Office, which is the investigative arm of Congress, said in a report Thursday that there were “some indications” that natural gas prices may have been manipulated on the West Coast in the winter of 2000-01.
The GAO said that until various federal investigations were complete “it is not possible to definitely establish whether and how much [energy] prices paid by consumers were affected.”
Dynegy traders gave false data to newsletters that compile gas-price surveys from at least January 2000 through June 2002, the U.S. Commodity Futures Trading Commission said. The false prices and trading volumes related to pipeline hubs in California and the Henry Hub in Louisiana, which is the delivery point of the New York Mercantile Exchange’s futures contract.
In October, Houston-based Dynegy fired six traders and disciplined seven other workers after an internal probe found that they reported false trade information to industry publications.
The CFTC said its investigation revealed that from January 2000 through this June, Dynegy and West Coast Power, a joint venture in California between Dynegy and NRG Energy, reported fake trade, price and volume information to firms which use those reports to calculate index prices of natural gas.
