Emboldened by its victory in an affiliate case involving Goldman Sachs, consumer advocacy group Public Citizen last week asked FERC to reconsider a ruling involving another investment bank, JPMorgan Chase.

Public Citizen filed for rehearing of FERC’s March 30 conditional approval of JPMorgan’s acquisition of El Paso Electric (EC19-120). (See FERC Conditionally OKs JP Morgan’s Purchase of EPE.)

JPMorgan is funding its $4.3 billion purchase of EPE through a web of financial affiliates, led by its Infrastructure Investments Fund (IIF) and Sun Jupiter Holdings. Sun Jupiter is the sole shareholder of Merger Sub, a corporation formed for the purpose of merging with and into EPE, with EPE as the surviving entity. Sun Jupiter is also an indirect, wholly owned subsidiary of IIF Sun Jupiter Ultimate Holdings.

Tyson Slocum, Public Citizen’s energy program director, told RTO Insider that the order was a result of FERC’s “deeply flawed” paper hearing process, in which commissioners consider the written evidence in private before issuing a decision.

“FERC can pick and choose what it wants to focus on and what it wants to ignore,” Slocum said. “They simply ignored the evidence [of self-dealing] we provided.

Public Citizen said FERC’s order, which directed the companies to file a mitigation plan addressing market power screen failures, ignored evidence that “JPMorgan’s affiliation with IIF poses a risk to the rates of El Paso Electric’s captive customers.” The group noted that the commission declined “to address the arguments related to whether the IIF companies are affiliated with JPMorgan and/or J.P. Morgan Investment [Management].”

The commission agreed with the applicants’ assertion that any affiliation between the IIF companies with JPMorgan would not change its analysis under the Federal Power Act.

Public Citizen said FERC cannot decline enforcement under the FPA and “must make a determination of whether JPMorgan Chase & Co. is affiliated with the IIF shell companies seeking to acquire El Paso Electric, as JPMorgan’s affiliation with IIF — and the impact that affiliation has on rates — has been the only contested issue of this entire proceeding.”

“I don’t think they can lawfully decline to address the cornerstone of their obligations under the Federal Power Act,” Slocum said.

In the filing, Public Citizen pointed to FERC’s April 27 decision granting Public Citizen’s protest and ruling that Goldman Sachs Renewable Power Marketing was an affiliate of The Goldman Sachs Group investment bank. (See FERC: New Goldman Unit an Affiliate.)

The group said the Goldman Sachs ruling “demonstrates the need for” JPMorgan to produce the operating agreements, management services agreements, limited liability company operating agreements and all other corporate documents “that describe the powers and responsibilities of the various parties within each IIF shell company.”

“Such documents are necessary to determine affiliation of JPMorgan Chase & Co. with IIF,” Public Citizen said. “The issue of JPMorgan’s affiliation with IIF is necessary for FERC to determine whether the acquisition of El Paso Electric by IIF is consistent with the public interest.”

Public Citizen said evidence that JPMorgan instructed IIF to purchase 120 million shares of a power company held by the investment bank indicates the new owners’ “self-dealing” could increase rates for EPE’s captive customers.

Slocum said his organization will also be intervening in Xcel Energy’s proposed $680 million sale of its 760-MW Mankato Energy Center in Minnesota to Denver-based Southwest Generation. Southwest Generation is owned by institutional investors advised by J.P. Morgan Asset Management.