Supreme Court to rule in pair of cases involving federal energy regulation News
Supreme Court to rule in pair of cases involving federal energy regulation

[JURIST] The US Supreme Court [official website] on Monday granted certiorari [order list, PDF] and consolidated a pair of cases that concern the scope of the Federal Energy Regulatory Commission (FERC) authority to regulate demand response [FERC backgrounder] technology based on its impact on wholesale electricity rates under the Federal Power Act (FPA) [text]. The cases are EnerNOC, Inc. v. Electric Power Supply Association and Federal Energy Regulatory Commission v. Electric Power Supply Association [SCOTUSblog materials]. Justice Samuel Alito recused himself from consideration of the court’s motion and review of the two petitions. The questions presented as stated by the court are:

1) Whether the Federal Energy Regulatory Commission reasonably concluded that it has authority under the Federal Power Act, 16 USC &#167 791(a) et seq., to regulate the rules used by operators of wholesale electricity markets to pay for reductions in electricity consumption and to recoup those payments through adjustments to wholesale rates; and, 2) Whether the Court of Appeals erred in holding that the rule issued by the Federal Energy Regulatory Commission is arbitrary and capricious.

FERC has jurisdiction [FERC backgrounder] over the transmission of electric energy in interstate commerce, the sale of electric energy at wholesale in interstate commerce, and over regulations that affect the transmission of electric energy in interstate commerce. Authority over retail electricity sales commonly falls under state’s public utility commissions. In the second case, FERC v. EPSA, the court must decide if FERC exceeded its authority under the FPA when it issued Order 745 [text, PDF] in 2011, thereby creating new regulations for demand response transactions at wholesale. Demand response is a broad new program [SCOTUSblog op-ed] that seeks to develop consumer participation in the electricity supply market, in which consumers receive a payment for reductions in electricity use during peak times. EnerNOC [official website] is a leading provider of energy intelligence software (EIS) that allows energy consumers to reduce energy costs, optimize energy consumption, participate in demand response, and manage peak demand. Last May the US Court of Appeals for the DC Circuit [official website] vacated Order 745 [opinion, PDF], holding that FERC did overstep its authority because Order 745 is a direct attempt to regulate the retail market.

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