The Supreme Court heard oral argument today in FERC v. Electric Power Supply Ass’n, the case involving demand response, when customers reduce or shift their electricity usage during peak periods in response to financial incentives. It originates from a 2011 FERC order (Order 745) that set rules and compensation for demand response resources in wholesale energy markets to try to allow these resources to compete with traditional generators. In 2014, the D.C. Circuit vacated FERC’s order, and FERC appealed to the Supreme Court.
The Supreme Court granted review on two distinct questions: (1) Does FERC have jurisdiction to set rules for demand response at the wholesale level; and (2) Was the compensation set by FERC arbitrary and capricious?
I joined with other energy law professors in filing an amicus brief with the Supreme Court in this case, arguing that the D.C. Circuit erred when it ruled that FERC lacked authority to regulate demand response compensation in the wholesale electricity markets: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2631599. My prior work that touches on the slippery jurisdictional grey areas associated with untraditional resources like demand response can be found here with respect to energy storage: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2294056.