- FERC has proposed about $30 million in civil penalties and returned profits, alleging that Powhatan Energy Fund LLC manipulated PJM Interconnection markets in a series of 2010 trades.
- According to FERC, Houlian "Alan" Chen and made fraudulent "Up To Congestion" transactions in PJM Interconnection energy markets on behalf of Powhatan and HEEP Fund LLC.
- Powhatan has waged a public campaign against FERC's investigation, releasing a video along with documents that previously were confidential, to defend the firm's actions.
FERC is calling for Powhatan and Chen to explain why they should not pay roughly $30 million in fees and returned profits for manipulating the PJM wholesale power markets. The company has responded forcefully, putting together a video featuring energy-market experts and releasing previously-confidential documents.
According to FERC's Office of Enforcement, with Powhatan’s knowledge and encouragement Chen placed UTC trades "in opposite directions on the same paths, in the same volumes, during the same hours for the purpose of creating the illusion of bona fide UTC trading and thereby to capture large amounts of [Marginal Loss Surplus Allocations] that PJM distributed at that time to UTC transactions with paid transmission."
Responding to FERC's claims of manipulation, the company said "Powhatan strongly disagrees. We feel forced to share the full details of their investigation alongside independent analysis of the charges." Powhatan has put together a web site detailing the investigation and making documents available.
FERC Commissioner Phillip Moeller Statement issued a statement he said was intended to "clarify" the enforcement process: “In the show-cause order, the Commission noted that issuance of the staff report does not indicate Commission adoption or endorsement of staff’s findings. This statement reflects the Commission’s long-standing practice not to pre-judge the findings made in staff reports. Instead, the Commission will consider the entire record in this proceeding to determine whether the assessment of civil penalties is appropriate.”