Entergy Corp. on Tuesday disclosed in its latest quarterly report that the utility’s energy trading joint venture, Entergy-Koch Trading, “has become aware that some of its employees may have misreported prices and volumes to energy industry publications.”

Entergy said that the discovery of the possible misreporting cropped up during reviews in connection with a Commodity Futures Trading Commission (CFTC) investigation. “Entergy-Koch Trading, however, is not aware that any employee participated in manipulation or attempted manipulation of energy price indices,” the utility said.

FERC staff in March issued a final report on price manipulation in Western markets that identified and raised questions about 61 pairs of gas trades completed by Entergy-Koch Trading.

Entergy said that based on information currently available, these 61 pairs of trades represent less than one-half of 1% of Entergy-Koch Trading’s volume and less than one-tenth of 1% of Entergy-Koch Trading’s revenues for the period under review by FERC had Entergy-Koch recorded revenues for the year ended 2001 on a gross basis. Entergy-Koch adopted the net method of reporting for trading revenues in December 2001.

Entergy-Koch Trading in April received a subpoena from the CFTC seeking information on gas and power trading activities of Entergy-Koch Trading and affiliated companies, including Entergy Power Marketing Corp., which was in operation prior to the launch of Entergy-Koch on Feb. 1, 2001 (see Daily GPI, April 9). The CFTC sought information on trading activities relating to “wash trades” as well as information furnished to energy industry publications in 2001 and 2002.

That same month, Entergy received an informal inquiry from the Securities and Exchange Commission (SEC) requesting information related to “pre-arranged round trip or ‘ wash’ trades” by Entergy, Entergy-Koch or Entergy-Koch Trading in 2001 and 2002.

Entergy said in the 10Q quarterly report that it “intends to cooperate fully” with the SEC and the CFTC. Both Entergy and Entergy-Koch Trading have provided information to the SEC and are conducting internal reviews and responding to information requests from the CFTC.

Entergy-Koch LP is a venture between subsidiaries of Entergy and Koch Industries Inc.

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