The Connecticut attorney general on Monday asked the Federal Energy Regulatory Commission to force electricity generators operating within the New England power market to pay back nearly $86 million to rate payers.

In a related action, AG Richard Blumenthal unveiled an anti-trust investigation into both the generators operating within the New England Independent System Operator and the power grid manager itself.

Blumenthal, a long-time critic of the deregulated markets in the Northeastern states, said the generators received almost $86 million for services the companies never provided.

Companies such as NRG Energy Inc (NRG), Entergy Corp (ETR), Dominion Resources Inc (D), and Public Service Enterprise Group Inc. (PEG), operate within the New England ISO.

According to his office, a number of unnamed generators were paid to provide power during peak demand periods, but on 108 occasions between 2006 and 2009, failed to supply electricity as requested.

"There was a need, and a request, but it was rejected," Blumenthal told Dow Jones Newswires in a telephone interview.

A spokeswoman for ISO-New England said the firm would soon provide FERC with information to address the AG's concerns, but couldn't immediately elaborate.

A FERC spokeswoman declined to comment, but a said the formal complaint had been received.

In the anti-trust probe, Blumenthal said he's demanded the New England ISO to release the names of the generators who received payment, but said so far, the system operator has refused to comply.

"These generators swindled rate payers out of nearly $86 million, and I will fight for a full refund," Blumenthal said in a press release.

"I am today asking FERC to compel these unscrupulous power providers to return every penny to rate payers," he said.

In an anti-trust probe, the AG must show that companies colluded to manipulate power prices, such as not providing power during peak periods, which could push prices artificially up. Blumenthal told Dow Jones Newswires that was one of the scenarios his office was investigating.

Among the allegations filed in the AG complaint to FERC, Blumenthal alleges that un-named market participants manipulated the market, "collectively and simultaneously" by designed their bidding activity "so as to increase their energy bids filed with ISO-NE to levels far in excess of their cost of production."

The Connecticut AG also asked the Commission to investigate why the New England ISO "apparently failed to hold the (market participants) accountable for their repeated failures."

As part of the complaint, Blumenthal's seeking to change the regulations that allowed the alleged payments without service, as well as the reporting structure of the New England ISO.

By Ian Talley, Dow Jones Newswires; (202) 862 9285; ian.talley@dowjones.com;