Supreme Court Approves Demand Response

Feb. 4, 2016

Ruling will drive down electricity costs.

Demand response policies have withstood a legal challenge! This energy-saving method has been affirmed by the U.S. Supreme Court in a decision that will help large electricity customers save money on utility costs.

The practice encourages users to throttle down electricity consumption when demand is high in exchange for lower rates. But this form of energy responsiveness was recently challenged by power suppliers who argued that the Federal Energy Regulatory Commission’s entry into demand response activities constituted an overreach of its authority by effectively regulating retail energy markets.

As detailed in the Federal Energy Regulatory Commission v. Electric Power Supply Association case, the USSC found in a 6-2 ruling that the FERC was justified in setting demand response rates and the agency will be allowed to continue. The ruling is expected to allow even more users to take advantage of demand response. This will not only help cut costs for electricity customers, but can also lessen strain on the grid and reduce the need for fossil fuels.

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