On Monday, SCOTUS helped solidify one of President Obama’s major policy goals by ruling in favor of the “demand response” provisions of the Federal Energy Regulatory Commission (FERC).

The decision appears to be the end-of-the-line for major opponents of the regulation now that FERC has received the Supreme Court’s blessing.

At issue was the provision included in the FERC law intended to manage peak energy use consumption. Under “demand response,” local and regional electricity grid operators agree to pay large sums of money to large peak energy consumers like schools, businesses, and hospitals in order to ease them off of use during those times.

Energy Policy Push

For years, President Obama had pushed for broad and sweeping policy reforms aimed at lowering energy costs, reducing consumption, and reducing overall national carbon footprints.

SCOTUS ruled and reversed a DC Circuit ruling that had earlier determined that the “demand response” regulation of FERC was unconstitutional. FERC is the go-to federal regulatory law exerting jurisdiction over the wholesale electricity markets. States typically run the show with regards to the retail markets. The challengers’ argument was simple: FERC overreaches and extends its authority into the retail markets, a federal no-no.

But Justice Kagen, who wrote for the majority, disagreed. “The commission’s rule addresses – and addresses only – transactions occurring on the wholesale market.”

Monday’s ruling struck the White House as good news: “This decision allows us to continue realizing billions in annual savings… [and help] integrate more energy more efficiently [and bring] more renewable energy onto the power grid,” said White House spokesman Frank Benenati.

Proponent Perks

EnerNOC, Inc., one of companies that supported the bill, was rewarded for its loyalty and gained about $3 on Nasdaq trading immediately following the ruling. Companies that opposed the regulation fell overall given the SCOTUS ruling. The company’s stock has since cooled down, however.

Related Resources:

  • SCOTUS Upholds FERC Authority over Demand Response (Energy Manager Today)
  • Which Prez Candidate Obsessed Over Death, Murder as SCOTUS Clerk? (FindLaw’s U.S. Supreme Court Blog)
  • FERC Loses BNP Paribas Appeals Case in D.C. Cir. (FindLaw’s U.S. D.C. Circuit Blog)
  • SCOTUS Takes Electricity Regulation Case (FindLaw’s U.S. Supreme Court Blog)

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