Hedge fund twins Kevin and Richard Gates, already embroiled in a battle with the Federal Energy Regulatory Commission’s Office of Enforcement, have now taken on PJM.

The Gates brothers and a trader for their Powhatan Energy Fund are awaiting a ruling from FERC on an order to show cause why they shouldn’t be fined for allegedly making round-trip up-to-congestion trades to collect line-loss rebates.

A PJM analysis done at the request of the Office of Enforcement showed that Powhatan’s trading strategy cost more than 20 market participants at least $100,000 each. PJM issued a statement Feb. 3 criticizing Powhatan’s trading activities, saying the fund failed “to appreciate the unique legal and regulatory framework governing organized wholesale electricity markets.” (See PJM: Gates’ Trades Cost Exelon, AEP, Dominion $1M Each.)

“Yeah, perhaps we do not understand this ‘uniqueness,’” Powhatan said in a press release last week. “We were under the impression that constitutional protections applied to all regulated markets in this country, including theirs.

“Our activities were perfectly legal,” the statement continued. “And the thing is — PJM knows it.”

PJM spokesman Ray Dotter’s response to the latest Gates salvo was short and to the point.

“While we stand by our position, the simple fact is that Powhatan’s problems will be resolved by FERC and the courts and not by any opinions held by PJM or Powhatan,” he said.