Green Plains to Pay Civil Penalty of $927,990 & Restitution of $19,069, Plus Interest and Implement Compliance Improvements for Market Manipulation

Summary:

FERC approved the Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (Enforcement) and Green Plains, Inc. (Green Plains). The Agreement resolves Enforcement’s investigation into whether Green Plains violated Section 4A of the Natural Gas Act (NGA) and the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.1 by selling physical gas at a loss or negligible profit at MichCon during bidweek in four months in 2023 to benefit its financial positions. Green Plains agrees to (1) pay a civil penalty of $927,900 to the United States Treasury; (2) pay restitution of $19,069, plus interest to five affected companies; (3) implement compliance measures plus compliance monitoring as provided in the Agreement; and (4) institute a trading ban of two years at MichCon during bidweek if the Company holds a related financial position that settles on the IFERC MichCon index.

Additional Discussion:

The violations determined by the Federal Energy Regulatory Commission (FERC) are as follows.

1. Violation of Section 4A of the Natural Gas Act (NGA), 15 U.S.C. ​§ 717c-1: Green Plains engaged in manipulative trading practices during bidweek in four months of 2023 (January through April). ​ Specifically, Green Plains sold natural gas at a loss or negligible profit to benefit its short leveraged financial positions that settled off the IFERC MichCon index. ​
2. Violation of the Commission’s Anti-Manipulation Rule, 18 C.F.R. ​§ 1c.1: Green Plains’ trader managed natural gas storage at MichCon and entered into short financial positions at the same location, knowing that Green Plains would need to sell gas from storage during winter months.​ The financial positions were often significantly larger than the quantity of gas in storage, which contributed to the manipulative scheme. ​
3. Failure to Fully Implement Compliance Enhancements: Despite agreeing to implement compliance measures after a similar inquiry in 2021, Green Plains failed to strictly enforce these measures in early 2023, contributing to the violations. ​

Green Plains agreed to pay a civil penalty of $927,990 to the United States Treasury and restitution in the amount of $19,069 plus interest to be allocated to Chevron Natural Gas, a division of Chevron USA Inc. ($1,719, plus interest), Sequent Energy Management LLC ($2,614, plus interest), Six One Commodities LLC ($4,234, plus interest), TC Energy Marketing Inc. ($3,903, plus interest), and Vitol Inc. ($6,599, plus interest).

Associated Files: 20250613-191FERC61200-IN25-2-000-Green Plains- Settlement Agreement