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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice. While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you.

Entries in Demand Response (2)

Wednesday
Jan272016

“The Rate Is What It Is”: Supreme Court Upholds FERC’s Demand Response Rule 

At oral argument in FERC v. Electric Power Supply Association, the Government argued that the retail rate or price of electricity “is what it is”—exactly the amount charged to the customer, without considering any foregone benefits. On Monday, the Supreme Court agreed with that characterization and upheld FERC’s Demand Response rule, rejecting arguments that the rule exceeded FERC’s authority by regulating retail electric rates that are exclusively the domain of state regulators. But before we get to the merits, some background is in order.

What is Demand Response?

Demand Response (DR) refers to the practice of incenting electricity consumers to reduce their demand for power during times of peak power usage. During these peak times, electricity becomes very expensive to generate as older and more inefficient generators are required to run to meet the high demand.

Grid operators throughout the country are tasked with precisely balancing electricity demand and supply at all times. Historically, these grid operators focused on the supply side of the equation—overseeing markets to ensure there is an adequate supply of generation to meet forecasted demand. Over the last 10-15 years, however, FERC and regional grid operators have learned that by lowering demand, they can reduce wholesale power costs and improve grid reliability.

 

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Friday
Apr122013

Energy News Roundup: April 6-April 12