By David Sheppard

NEW YORK (Reuters) - A Congressman on Wednesday called on the Department of Justice to investigate JPMorgan Chase & Co's power trading in Michigan, as the Federal Energy Regulatory Commission (FERC) considers whether to sanction the firm.

Michigan Congressman Dan Kildee, a Democrat who sits on the Committee on Financial Services, said in a letter to the DoJ that it should pursue its own investigation into JPMorgan to see if it manipulated electricity markets.

The bank has told shareholders it has been notified by FERC staff that they intend to recommend that the five members of the commission take action over an alleged manipulative trading scheme in Michigan and California earlier this decade.

JPMorgan has denied that it manipulated power markets, and has vowed to "vigorously defend" itself and its employees.

"These allegations are serious charges, including traders devising deliberate schemes to manipulate energy prices and top bank executives lying under oath," said Kildee in the letter, a copy of which was obtained by Reuters.

"The people of Michigan, and the American public generally, deserve a marketplace where all participants play by the same rules. I urge the Justice Department to resolve this matter by investigating these potentially illegal practices."

JPMorgan spokeswoman Jennifer Zuccarelli declined on Wednesday to comment on Kildee's letter, but said that the FERC notice to the bank is only a "statement of the staff's views, and does not represent findings of the commission."

She added "we strongly disagree" with the FERC conclusions.

The Commission has not accused the bank of market manipulation. Federal regulators often notify targets of investigations to give them a chance to show why enforcement actions should not be brought.

The regulator has, however, sanctioned the U.S. bank's electricity trading unit for failing to disclose information during the investigation. It imposed a six-month long restriction on its power trading starting April 1.

Pressure has also mounted on the bank since a May 2 New York Times report cited a confidential FERC document saying investigators had found evidence JPMorgan Energy Ventures Corp. devised "manipulative schemes" in Michigan and California between 2010 and 2011.

The alleged scheme saw authorities in California and Michigan make "excessive" payments of around $83 million to JPMorgan, the New York Times report said citing the FERC document.

FERC Chairman Jon Wellinghoff, who has stepped up enforcement of rules and investigations into Wall Street banks' trading practices during his time at the regulator, on Tuesday submitted his resignation to President Barack Obama.

He will remain at the agency and continue to vote on commission matters until a replacement is nominated and confirmed by the U.S. Senate, a process that could take several months. His term was due to expire at the end of June, and his departure had been anticipated.

(Reporting by David Sheppard; Editing by Bob Burgdorfer)

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