The Federal Energy Regulatory Commission said Thursday irregularities in how power was routed in New York's market last year wasn't the result of manipulation.

Regulators were investigating a practice where market participants scheduled power to be delivered over circuitous routes, such as around Lake Erie, instead of directly between New York and Pennsylvania or New Jersey. Known as looping, most of the power was actually shipped over more direct routes, but participants paid less by booking the less-congested routes. The more-circuitous routes booked by market participants distorted the New York market, leading to higher costs for consumers, according to the New York Independent System Operator.

FERC also said Thursday the New York ISO and neighboring markets need to develop a long-term fix for the looping issue in the next six months.

-By Mark Peters, Dow Jones Newswires; 212-416-2457; mark.peters@dowjones.com