The Federal Energy Regulatory Commission in the US has imposed a harsh penalty on JPMorgan Chase & Co's electricity-trading unit that will prevent it from selling electricity in California's auction-based market for six months starting in April.

The ruling, which was announced on Wednesday, will keep the company away from millions of dollars in profits in the state. The penalty was imposed after FERC concluded that JPMorgan Ventures Energy Corp had misled investigators in overcharges to the California Independent System Operator.

The operators of the state's power grid had filed a petition with the federal regulators urging action against the company. They accused Morgan of creating legal hurdles for trade of two Huntington Beach power plants, which will play crucial role in powering the state requirements in the next summer season.

The operators said that the company was trying to block the plants and this could result in possible brownouts and rolling blackouts during the next year's summer season. Grid operators are asking FERC to rule that JPMorgan's consent is not essential for upgrading the Huntington Beach power plants. The upgrades are required to maintain high voltage in transmission lines in order to meet the high demand during summer season.