Decision helps reduce barriers to critical clean energy resource, reducing rates and enhancing grid reliability
Washington, D.C. — Today, the U.S. Supreme Court issued a decision that ensures that a critically important clean energy resource will continue to provide key benefits in our wholesale energy markets. It decided that the Federal Energy Regulatory Commission (FERC) has the authority to remove barriers to "demand response" programs, which compensates consumers for reducing their power use at certain times to help balance supply and demand on the power grid, and that FERC's landmark demand response rule reflects reasoned decision making. Demand response saves Americans hundreds of billions of dollars each year, eases the burden on the power grid, reduces climate change pollution and helps bring more clean energy online.
This decision reverses a D.C. Circuit Court of Appeals verdict that struck down FERC's demand response rule called Order 745, which set compensation levels for demand response in wholesale energy markets. This rule essentially requires grid operators, in certain circumstances, to pay for the fair value of demand response in our wholesale energy markets, placing demand response on a level playing field with power plants. As a result, demand response has flourished, spurring investment and innovation that contributes to a cleaner power grid.
Earthjustice served as co-counsel in a friend-of-the-court briefing for the case, which supported FERC's rule and sought reversal of the D.C. Circuit Court of Appeals verdict.
The following statement is from Earthjustice Managing Attorney of Clean Energy Jill Tauber:
"This is a great day for clean energy and the health of a more affordable, stronger power grid. Demand response provides tremendous benefits to our environment, helps consumers save money and makes our electricity grid more reliable. Today's decision confirms FERC's ability to remove barriers to this vital clean energy resource in wholesale energy markets and fulfill its responsibility to ensure just and reasonable rates and enhance reliability."