JPMorgan Chase is reportedly accused of manipulating energy prices to make money-losing power plants seem profitable.

Between 2010 and 2011, JPMorgan Chase sold electricity to authorities in California and Michigan at prices “calculated to falsely appear attractive,” reads a confidential government document acquired by The New York Times.

The alleged market manipulation cost the states $83 million in excess payments.

The nation's largest bank could face stiff penalties from the Federal Energy Regulatory Commission (FERC), a low-profile agency charged with regulating the sale of electricity. FERC has not yet made a public statement about the investigation, but analysts suggest the regulator is likely to pursue charges. Call it the "Enron effect."

"In 2001, FERC acted as if market manipulation was a sort of boys-will-be-boys situation," Frank Lindh, general counsel at the California Public Utilities Commission (CPUC), said in a telephone interview. "Now, they seem to be taking it more seriously."

While not directly involved in the current investigation, CPUC continues to seek billions of refunds from companies involved in the 2000-2001 California energy crisis, Mr. Lindh said. In that case, market manipulation caused a shortage in electricity and multiple widespread blackouts in the state.

Enron Corp., the most infamous of the energy companies involved, used accounting loopholes to hide billions of dollars in debt from shareholders. The company's stock plummeted to less than a dollar in mid-2000 and it filed for bankruptcy in December 2001.

The fallout pushed Congress to expand FERC's regulatory powers. The Energy Policy Act of 2005 allowed FERC to pursue market manipulation cases and impose penalties in addition to ordering refunds.

The agency has been active recently, issuing its largest fine ever to London-based Barclays Plc last December. The bank faces $488 million in penalties for a “three-part manipulative scheme” to rig energy markets.

In January, Deutsche Bank agreed to pay $1.6 million in penalties for manipulation of California power markets.

"If you’re committed to markets, you would take umbrage if people abused your discretion," said Marc Spitzer, a former FERC commissioner and partner at Washington-based Steptoe & Johnson LLP.

It's not unusual for FERC to send warning letters to companies that are under investigation, Mr. Spitzer noted, but a lot of those cases are resolved amicably upon additional review.

"The cases where FERC votes on order to show cause reflects a small percentage of investigations that are opened."

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JPMorgan has until at least mid-May to respond to the charges, according to the document reviewed by The New York Times.

A FERC spokesman declined to speak on the matter. JPMorgan did not respond to a request for comment.