July 17 (Reuters) - JPMorgan Chase & Co and the U.S. Federal Energy Regulatory Commission (FERC) are close to reaching a settlement that could result in the bank paying the largest penalty ever over allegations of power market manipulation in California and the Midwest, the Wall Street Journal reported on Wednesday. The amount to be paid is not yet known, but past discussions have involved close to $1 billion, the newspaper said, citing people familiar with the matter. JPMORGAN POWER TRADING TIMELINE 2005 - FERC authorizes JPMorgan to sell power at market based rates, starting its trading in U.S. power markets. 2008-2010 - JPMorgan acquires a number of power plants and electricity tolling agreements through its purchase of Bear Stearns and RBS Sempra during the financial crisis. March 2011 - Grid operator California ISO filed with national regulator FERC to fix a loophole in the power market bidding process after a party's behavior "aggravated the market impact of the flaw." That party was later identified as JPMorgan. March 2011 - California ISO informs JPMorgan the grid operator reviewed the bank's bidding activities and intends to refer the matter to the FERC Office of Enforcement, marking the start of FERC's investigation. April 2011 - After California ISO asked FERC to close a loophole that allowed traders to engage in exploitative power bidding practices, the state grid operator said a trader, later identified as JPMorgan, started to immediately exploit another loophole in their rules. April 2011 - California ISO forces power sellers to reimburse $35.3 million to electricity distributors from trades executed from August 2010 to March 2011 due to effect of exploitive bidding practices. Feb-June 2012 - California ISO imposes a non-public $486,000 penalty against JPMorgan in February for failing to submit all information the grid operator sought as part of its investigation into exploitative bidding practices. FERC rejects the bank's appeal of the penalty. June 2012 - Grid operator California ISO asks FERC to approve its plan to force power sellers to reimburse money earned from exploitive bidding practices to electricity distributors from April 2009 to March 2011. The ISO had already forced power sellers to reimburse $35.3 million in April 2011 for the period between August 2010 and March 2011. July 2012 - FERC subpoenas JPMorgan in federal court to provide emails as part of its investigation into market manipulation in California and the Midwest, the first time the bank has been publicly named as the party that allegedly manipulated the California market. November 2012 - FERC suspends JPMorgan's authority to sell power at market based rates for six months for making factual misrepresentations during an investigation into market manipulation. The ban is to start in April 2013. April 2013 - JPMorgan six-month ban on selling power at market based rates begins. May 2013 - An internal FERC document leaked to the New York Times says the regulator may charge JPMorgan with power market manipulation. The document also says JPMorgan's commodities chief, Blythe Masters, may have made "false and misleading statements," to the regulator under oath. May 2013 - JPMorgan tells shareholders FERC may take action against bank for certain power market bidding activities. (ID:nL2N0DP33K] May 2013 - JPMorgan reduces presence in California power market, selling the right to market electricity from three power plants. June 2013 - FERC approves a request from California ISO to force JPMorgan and other traders to reimburse $16.7 million to electricity distributors in the state for disruptive bidding practices between April 2009 and March 2011.