White House to appeal controversial demand response ruling 

Source: Hannah Northey, E&E reporter • Posted: Tuesday, December 9, 2014

The Obama administration signaled Friday that it will ask the Supreme Court to review a controversial court ruling that left a high-profile federal demand response program in disarray earlier this year.

Solicitor General Donald Verrilli in a letter asked the Supreme Court for an extension through Jan. 15 to file a petition for a writ of certiorari to review a federal court’s ruling that scrapped the Federal Energy Regulatory Commission’s demand-response program.

The current deadline for such an appeal is Dec. 16. “This extension of time is needed to prepare and print the petition,” Verrilli wrote.

If accepted, the Supreme Court would review the U.S. Court of Appeals for the District of Columbia Circuit’s decision to vacate FERC’s so-called Order 745, which directs demand-response providers such as factories or commercial buildings to receive full market prices when they curtail electricity use.

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 sometime next spring.

The appeals court in May overturned FERC’s program, finding that demand response falls within states’ jurisdiction — not FERC’s — and that the commission infringed on states’ authority under the Federal Power Act.

FERC Chairwoman Cheryl LaFleur in a statement said she was pleased that the solicitor general decided to petition the Supreme Court. “I believe the commission’s ability to regulate demand response in wholesale electric markets is of vital importance,” she said. “Demand response contributes to reliability, sustainability, and affordability of electric service.”

White House senior counselor John Podesta said last week at a smart grid industry gathering that Verrilli was getting “a lot of input” from the White House and U.S. EPA when considering whether to ask for time to appeal the federal court’s decision and said the administration was not content to let the ruling stand because FERC’s powers to incentivize demand-side efficiency “are really critical to our future” (E&ENews PM, Dec. 3).

The court’s ruling is seen as complicating implementation of EPA’s Clean Power Plan, which assumes states can achieve substantial emissions reductions through efficiency measures.

The legal decision has also caught the eye of lawmakers. Sen. Martin Heinrich (D-N.M.) introduced legislation, S. 2947, that would allow FERC to ensure demand response is compensated on equal footing with power generation.