Our legal team filed a brief this morning in a Supreme Court case that could have a significant impact on your utility bills.
The case revolves around something called “Demand Response” (DR)– when power grid operators pay customers to shift electricity usage from high-demand times of the day, when hourly prices naturally skyrocket. These programs affect all electricity customers because they reduce stress on the grid, prevent widespread power outages, and cut overall power prices for everyone.
“Demand response has proven to be a cost-effective resource for system operators to use in balancing supply and demand,” the brief said. “It provides not only critical support in emergencies, but reduces peak demand, which, in turn, provides economic benefits not only to those customers who reduce their demand but to all customers within a wholesale market.”
The former head of the Illinois Power Agency estimated that removing demand response could cause power prices to jump 20 percent.
Under Order 745, the Federal Energy Regulatory Commission (FERC) had the authority to promote, regulate and develop DR programs in the energy market. This didn’t make electricity generators too happy, since they profit off high prices. So they took it to the courts and a 2014 Appellate Court decision overturned FERC Order 745, stating that demand response is an issue that should be regulated by state authorities rather than a federal agency.
We may have lost that fight, but the battle is far from over. In May, the U.S. Supreme Court agreed to hear an appeal of the case and accepted opening briefs from FERC, a grid operator, states and other parties earlier this week. Today, CUB along with 10 other interested parties filed an amicus brief, a document in support of parties to the case.
The Supreme Court is expected to hear oral arguments in the case this fall.