EnerNOC Jumps After U.S. Supreme Court Upholds Energy Rule

The U.S. Supreme Court on Monday resurrected the Federal Energy Regulatory Commission’s rule that consumers be paid for using less power during high-demand periods, overturning a D.C. Circuit ruling that the rule usurps state authority over retail electricity markets.

“Electricity has increasingly become a competitive interstate business, and FERC’s role has evolved accordingly”, Justice Elena Kagan wrote for the majority.

“As a key player in advocating the economic and environmental benefits of FERC Order 745, Comverge is extremely pleased the Supreme Court so decisively upheld the Order”, said Gregory J. Dukat, Comverge Chairman, President and CEO.

Jill Tauber, managing attorney of clean energy at Earthjustice, said that the decision removes “barriers to this vital clean energy resource in wholesale energy markets” and fulfills FERC’s “responsibility to ensure just and reasonable rates and enhance reliability”. Comverge has worked with hundreds of electric utilities to deploy almost six million energy management devices and enroll more than two million residential customers into mass-market demand management programs.

This system turns long-term energy efficiency and “demand response” – in which I reduce my electricity demand in response to the short-term needs of the grid – into something that has as much monetary value as traditional electricity generation. The Court ruled that FERC was within its authority under the Federal Power Act when it issued Order 745, which set standards for demand response practices and pricing in wholesale markets and brought the practice under the agency’s jurisdiction, according to aUtility Dive report.

Federal law gives the commission authority to regulate wholesale markets, while retail sales are governed by states.

At times of peak demand, it is costly for electricity generators to increase supply, so wholesale market operators sometimes pay large energy consumers such as factories, big-box stores, hospitals and schools to cut their use instead. They will also protect the reliability of the electric grid, she said.

“The commission’s rule addresses – and addresses only – transactions occurring on the wholesale market”, Kagan said.

Fortunately, environmental groups have welcomed this ruling.

NRG Energy said it felt the court decision was fair. “Wholesale market operators administer the entire program, receiving every demand response bid made”. Justice Samuel Alito was recused from he case.

“I think this is one of the greatest decisions for consumers and for the advancement of the utility grid in this decade”, Wellinghoff added.