Industry pushes court to end federal demand-response program 

Source: Hannah Northey, E&E reporter • Posted: Tuesday, December 16, 2014

Industry groups are asking a federal appeals court to vacate the government’s high-profile, demand-response program now instead of waiting to see whether the Supreme Court will review the case.

The Edison Electric Institute and other utility groups urged the U.S. Court of Appeals for the District of Columbia Circuit on Friday to reject FERC’s request to keep in place Order 745, which directs demand-response providers such as factories or commercial buildings to receive full market prices when they curtail electricity use.

D.C. Circuit judges vacated the rule in May, but the White House is asking the federal appeals court to keep Order 745 in place until its appeal plays out at the high court (Greenwire, Dec. 8).

Supreme Court justices typically give petitions submitted by the solicitor general a close review, but the odds of the court taking up the case are low. The Supreme Court receives thousands of petitions every year and grants fewer than 100. The court will likely consider the demand response petition next spring.

The D.C. Circuit ruled FERC far overstepped its authority under the Federal Power Act in issuing the order — a decision that was welcomed among EEI and the Electric Power Supply Association, groups that for years had argued the order went “too far” and trampled on states’ exclusive authority to regulate retail markets.

Supporters of the rule, on the other hand, argued FERC’s hands shouldn’t be tied to incentivize demand response on a rapidly changing electric grid (Greenwire, May 27).

The appeals court initially granted FERC a stay through tomorrow to file a request for a Supreme Court review, but the agency is now asking for an additional month while it finishes its Supreme Court petition.

David Morenoff, FERC’s general counsel, told the court in a Dec. 8 filing that a stay of the mandate is warranted because the court already granted the commission a 90-day extension after presumably finding “substantial legal question and good cause.”

Still, EEI, the American Public Power Association, National Rural Electric Cooperative Association and Old Dominion Electric Cooperative maintain FERC hasn’t made a case for a longer extension, nor has the commission identified any “harm — much less irreparable harm — that would result from denying its request.”

They argued that FERC could easily put the rule back in place if it is successful at the Supreme Court.

In the “very unlikely event” the Supreme Court takes up the case and “ultimately reverses” the D.C. Circuit ruling, they wrote, “the commission can always decide then to reinstate Order 745. In the meantime, the distortions caused by the Commission’s improper compensation scheme and jurisdictional violations should not be allowed to stand.”