* FERC does not say when it will decide on rehearing * FERC to block JPMorgan from some power trading * Banks reduced exposure to power markets since 2008 By Scott DiSavino Jan 14 (Reuters) - U.S. federal energy regulators on Monday extended the amount of time available to decide if they will grant a rehearing against JPMorgan that would temporarily suspend the bank's energy desk from trading in a segment of the power market. In November, the U.S. Federal Energy Regulatory Commission (FERC) temporarily banned JPMorgan Chase & Co's J.P. Morgan Ventures Energy Corp energy arm from trading power at market-based rates for six months, starting in April, for failing to disclose information in a market manipulation investigation. FERC has not accused the U.S. bank of market manipulation. JPMorgan has said it would fight the sanction. Market-based rate authority allows a company to trade power at whatever price the market will bear. Mary O'Driscoll, a spokeswoman at FERC, told Reuters JPMorgan asked for a rehearing and this order gives the commission more time to decide on that request. She said the order does not impose any date on the commission to make a decision. Officials at JPMorgan were not immediately available for comment. The FERC sanction does not affect the bank's ability to trade derivatives, futures, natural gas and other commodities. This sanction only bans JPMorgan from trading physical power at market-based rates. In a separate but related action, O'Driscoll said FERC on Friday filed an appeal in federal court in Washington of a magistrate's ruling in November blocking FERC from seeing redacted portions of emails the regulator requested as part of its investigation into possible market manipulation by the bank in California and the Midwest. FERC sued JPMorgan over the summer to get the redacted portions of the emails. But the bank said the information was confidential. BANKS REDUCE POWER EXPOSURE As other banks have reduced their power trading over the past few years since the Great Recession began in 2007, JPMorgan continued to trade large amounts of physical power, according to data submitted to FERC. In U.S. power markets, JPMorgan's physical electricity sales reached $3 billion in 2008, $2.9 billion in 2009, $2.8 billion in 2010 and almost $3 billion in 2011. In the first three quarters of 2012, the bank sold about $1.4 billion of physical power, according to a Reuters analysis of the FERC power sales data. JPMorgan stuck with power trading while other banks reduced their exposure to the market. There are many reasons for the decline. Power prices have fallen to 10-year lows across most of the United States thanks to an abundance of cheap natural gas. See With decades worth of cheap fuel ahead, fewer utilities have been looking to hedge their output; tough new capital requirements and regulations banning proprietary deals have cut into commodity trading; and some European banks, facing a persistent debt crisis back home, have fled dollar-intensive businesses. But many bankers and analysts see another cause for the pull-back by banks: the risk that a more aggressive FERC may target them for anything suggestive of nefarious trading. Some in the power industry feel FERC's sanction against JPMorgan could drive the bank to reduce its exposure to the power market.