WASHINGTON (January 25, 2016) — The U.S. Supreme Court today upheld the Federal Energy Regulatory Commission’s (FERC) authority to design rules and incentives that allow electricity customers to get paid for reducing consumption during periods of high energy demand. The decision keeps the door open for important clean energy resources to compete with traditional fossil plants in regional energy markets and save customers money on their electricity bills.
The case, known as FERC vs. Electric Power Supply Association, centered around FERC Order 745 and whether FERC could design rules for market participation by demand response, the practice of power grid operators providing financial incentives for customers to cut energy use when the grid is most stressed, such as when electricity demand is high. The high court’s ruling today overturns a May 2014 decision by the U.S. Court of Appeals for the D.C. Circuit that the states—not FERC—have exclusive jurisdiction over demand response, a position shared by power plant owners and others who stand to profit by selling more electricity. FERC, the Sustainable FERC Coalition, consumer advocates, and others asked the Supreme Court to overturn the lower court ruling, and the high court heard arguments in the case last October.
Following is a statement by Allison Clements, Director of the Sustainable FERC Coalition housed at the Natural Resources Defense Council:
“The Supreme Court’s decision is great news for consumers and the environment. It gives consumers more opportunity to save, and even make, money through smarter electricity use. Also, because demand response is flexible and fast-acting, it enables the affordable integration of more wind and solar power into the electricity transmission grid.
“Demand response is a critical tool for bringing energy markets into the 21st century by recognizing the value in avoiding carbon emissions and other pollution while maintaining a clean, affordable and reliable electric system.
“Today’s ruling gives clean energy a huge boost and keeps America moving forward toward our critical goal of slashing climate-warming emissions while maintaining a clean, affordable, and reliable electric system.”
Background on the case can be found at: https://www.nrdc.org/experts/allison-clements/supreme-court-decision-takeaways-great-demand-response-and-clean-energy. Clements will post a blog on the decision at: https://www.nrdc.org/experts/miles-farmer/epsa-decision-great-demand-response-and-nothing-states-fear