What do independent experts think?
Twelve independent experts reviewed the allegations. The video above describes the background of the investigation and the five videos below profile specific experts. Position papers from the twelve experts are found elsewhere on this site.
In its Preliminary findings, FERC recently charged Powhatan Energy Fund with market manipulation. We take their market manipulation allegations very seriously. However, we are rule followers who take compliance even more seriously. We have spent much time, energy, and resources preparing our recent legal arguments. We believe in them.
Powhatan launched this site because we didn’t want to wait two to three years to tell our side of the story—we want the public to know the full story now. Without it, it is impossible to fairly evaluate FERC’s allegations.
Powhatan has about ten investors. These individuals have reputations that are important to them. They are concerned that FERC’s accusations will unfairly harm their relationships with family that they love, friends who enrich their lives, and business acquaintances who are vital to their livelihoods. They communicate with these people at little league baseball games, in their neighborhoods, on their social media networks, while at work and elsewhere. They do not want to carry the stigma of unfounded accusations on their shoulders.
This site’s primary purpose is to share the legal documents that FERC’s Office of Enforcement and Powhatan have prepared and exchanged. Since we know the typical person may not want to go through hundreds of pages of legalese, the site also offers the opinions of a dozen independent academic and practitioner experts who have reviewed the legal documents. Their position statements are relatively short. The FERC’s Office of Enforcement was given three of the experts’ affidavits when the investigation was private. The other nine position papers were obtained when Powhatan learned that FERC might take the case public. These nine expert opinion papers have not been delivered to the FERC’s Office of Enforcement because it only gave us 60 days to respond to its preliminary findings. Despite having most of our materials for over a year, the Office of Enforcement made it clear that they would not grant us additional time to respond. So, we simply could not get the additional expert opinions completed before our response was due.
There is a lot of complicated information on this site. Here, we try to help you understand what’s being discussed.
Due Process: The Fourteenth Amendment to the United States Constitution requires, in part, that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited. It incorporates notions of fair notice or warning and requires legislatures to set reasonably clear guidelines for law enforcement officials and triers of fact in order to prevent arbitrary and discriminatory enforcement.
FERC: Federal Energy Regulatory Commission. The FERC is an independent agency that regulates the interstate transmission of electricity, natural gas and oil. It is part of the United States Department of Energy. The Commission is overseen by five commissioners who are appointed by the President of the United States with the advice of the United States Senate. Also known as “Commission.”
MLSA: Marginal Loss Surplus Allocation. This is the disbursement of over-collected transmission line losses. Also known as a “TLC.”
Monkeys throwing darts: A somewhat casual way of saying or implying the word “random” or concept of “randomization.”
Oceanside Power, LLC: A limited liability company that placed Up-to Congestion (see UTC) transactions at PJM in 2010. It is unrelated and not affiliated with Powhatan.
PJM: PJM Interconnection LLC. It is a Regional Transmission Organization that coordinates the movement of wholesale electricity in the electrical grid serving all or parts of 13 states in the Northeast and the Midwest. PJM is one of seven federally regulated transmission organizations and is based in Valley Forge, Pennsylvania.
Powhatan Energy Fund LLC: It is a private partnership with fewer than 10 investors. Also known as “Powhatan.”
Scienter: The United States Supreme Court defines scienter as a mental state embracing intent to deceive, manipulate or defraud.
Spread trade: A generic term for a type of trading strategy commonly used by traders in securities, commodities, and derivative securities markets and widely recognized by regulators as a legitimate trading strategy.
TLC: Transmission Loss Credit. This is the disbursement of over-collected transmission line losses. Also known as an “MLSA.”
Transparency: It is something that is honest, open, and not secretive. FERC’s Office of Enforcement has stated that they would like this characteristic to define the markets they regulate. This is one area of agreement Powhatan has with FERC and is the reason for this site.
Wash Sale: A transaction involving no change in beneficial ownership.
Bay, Norman: He is the Director of Enforcement at FERC. He has held this position since 2009.
Bowring, Joe: His firm, Monitoring Analytics LLC, is the Independent Market Monitor for the PJM markets. He was appointed by PJM and approved by the FERC. He and his firm are responsible for monitoring compliance with the rules, standards, procedures and practices of the PJM markets.
Burdick, Janel: She is a FERC Analyst who is involved in the investigation.
Chen, Alan: He was an independent manager who Powhatan hired to advise and manage the fund. He obtained a Ph.D. in engineering in China in 1995 and moved to the United States to seek a better life for him and his family. In the following decade, he gained experience and developed knowledge about the electrical grid in the United States, with a particular expertise in the PJM market.
Colbert, Cathleen: She is a FERC Analyst who is involved in the investigation.
Estes, John: He is an attorney at Skadden, Arps, Slate, Meagher & Flom LLP who represents Alan Chen, HEEP Fund, and CU Fund.
Gates, Kevin and Rich: They are both officers of Powhatan Energy Fund LLC’s managing member. They are identical twins who obtained their Eagle Scout awards in 1986.
Gong, Karis: She is an attorney at Skadden, Arps, Slate, Meagher & Flom LLP who represents Alan Chen, HEEP Fund, and CU Fund.
Hill, David: He is an attorney at Skadden, Arps, Slate, Meagher & Flom LLP who has represented Alan Chen, HEEP Fund, and CU Fund.
McSwain, William: He is an attorney at Drinker Biddle & Reath LLP who represents Powhatan Energy Fund LLC.
Olson, Tom: He is an attorney at FERC who has been involved in this case.
Owens, James: He is an attorney with the FERC Office of Enforcement. He works alongside Steve Tabackman.
Richardson, Sally: She is a law professor at Tulane University who previously represented Alan Chen, HEEP Fund, and CU Fund when she was an attorney at Skadden, Arps, Slate, Meagher & Flom LLP.
Rosenblatt, Lauren: She is an attorney with the FERC Office of Enforcement. Steve Tabackman reports to her.
Sarosiek, Tara: She is an attorney at Drinker Biddle & Reath LLP who represents Powhatan Energy Fund LLC.
Tabackman, Steve: He is the attorney who led the investigation of Powhatan for the FERC’s Office of Enforcement.
Powhatan Energy Fund LLC is a private investment partnership. The Federal Energy Regulatory Commission’s Office of Enforcement alleges in its preliminary findings that a trader the fund contracted manipulated the energy market. Powhatan strongly disagrees. We feel forced to share the full details of their investigation alongside independent analysis of the charges. This will enable the full story to be heard.
* Powhatan gave the Federal Energy Regulatory Commission (FERC) three expert affidavits when the investigation was private. Craig Pirrong Ph.D., Richard Wallace Esq., and Richard Tabors Ph.D. wrote these affidavits. We obtained the other nine position statements when we learned the FERC may make the case public. We have not formally submitted these nine expert opinions to FERC. The views expressed by the experts are their own. They do not speak on behalf of anyone else. The experts were compensated by either Powhatan or Heep Fund for their work.