WASHINGTON--U.S. regulators ordered BP PLC (BP, BP.LN) on Monday to respond to charges that it allegedly manipulated natural gas markets.
The order, issued by the Federal Energy Regulatory Commission, is the latest development in an inquiry dating back to at least 2011. The order directs BP to show why it should not pay a $28 million civil penalty and give up $800,000 in profits.
The energy commission claims London-based BP violated the Natural Gas Act by manipulating natural gas markets at Houston Ship Channel from September 2008 to November 2008.
BP spokesman Geoff Morrell said in a statement that the allegations "are without merit and we stand by what we previously disclosed...that BP natural gas traders did not engage in any market manipulation in late 2008."
Mr. Morrell said BP would "vigorously defend against these allegations."
If BP contests Monday's order, the energy commission can respond by issuing a civil penalty. The charges can move through a hearing process and could eventually end up in a federal court.
FERC has stepped its enforcement activity in recent years following passage of a new law that bolstered its powers. In July, FERC issued a $435 million civil penalty to Barclays PLC (BARC, BARC.LN) for alleged energy market manipulation--a charge Barclays has vowed to fight. More recently, FERC and JP Morgan Ventures Energy Corp. reached a $410 million settlement following charges of electricity market manipulation in California and the Midwest.
Write to Tennille Tracy at [email protected]