Inside the Beltway: Ruling Nullifying Fed’s Demand Response Program Appealed to Supremes

By Published On: December 11, 2014

Federal and state energy regulators will ask the U.S. Supreme Court to review an appellate court decision invalidating the Federal Energy Regulatory Commission’s demand response order. Meanwhile, they requested a 30-day extension to file their briefs. The federal rules for demand response participation are of “substantial importance to the proper functioning of the [wholesale] markets and to assuring just and reasonable rates for wholesale power in those markets,” states the U.S. Solicitor General’s Dec. 5 filing to Chief Justice John Roberts. FERC chair Cheryl LaFleur applauded the solicitor’s request for an extension of time. “Demand response contributes to reliability, sustainability, and affordability of electric service,” she stated Dec. 8. Requests to extend to Jan. 15 the deadline to file writs of certiorari at the High Court also were made by FERC and in a joint filing by the California Public Utilities Commission along with two other state utility agencies and demand response providers. “Adding demand response participation to the wholesale market has a direct and substantial impact on wholesale rates and system reliability, meaning that regulation of such participation is squarely within the Federal Energy Regulatory Commission’s jurisdiction,” according to the joint filing. Last May, the majority of a three-judge panel of the U.S Court of Appeals for the D.C. Circuit ruled that the federal commission’s demand response program under its Order 745 improperly infringed on state retail electricity markets. The full circuit court in September denied FERC’s request for a hearing on the matter (Current, Sept. 18, 2014). In October, the appeals court agreed to delay enforcing the order until Dec. 16 while regulators grappled with how to go forward. The briefs filed this week in support of the federal agency’s demand response program seek to extend the stay. Invalidation of the federal commission’s Order 745 could force demand response aggregators to refund revenue from selling negawatts in PJM’s wholesale energy market, which is the only one that implemented the federal policy. Negawatt aggregators also have contracts with California utilities.

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