Demand Response Case Moves Forward at the U.S. Supreme Court

Environmental Defense Fund (EDF) joined other environmental organizations in filing an amicus (or “friend of the court”) brief with the U.S. Supreme Court in a case that will affect Americans’ access to low-cost, clean and reliable electricity.

States, state consumer advocates, grid operators, leading economists, and a number of other experts also filed briefs in defense of greater market access to demand response resources. EDF filed its brief last night in support of the Federal Energy Regulatory Commission’s (FERC) Order 745 – the landmark policy that provides fair-market compensation for demand response in the wholesale energy market.

“Environmental Defense Fund strongly supports FERC Order 745 because it is firmly grounded in law and provides enormous benefits to customers in the form of lower electricity bills and cleaner air,” said EDF attorney Michael Panfil. “Anyone in favor of cleaner, more reliable, lower-cost energy has a reason to support demand response.”

Demand response is an energy conservation tool that relies on people and technology, not power plants, to meet America’s electricity needs affordably. It’s a resource that helps keep prices low and the lights on in an environmentally friendly way. In 2013, for example, demand response saved customers in the mid-Atlantic region close to 12 billion dollars.

EDF’s amicus brief explains that Order 745 is anchored in FERC’s “longstanding effort to promote market efficiency and open competition” and carries out “federal legislation expressly recognizing the benefits of ‘participation of demand response’ resources in FERC-regulated wholesale markets and committing the Nation to reducing barriers obstructing their realization.” 

EDF’s brief also says:

“Wholesale demand response provides important public health and environmental benefits, which are not accounted for in wholesale market prices, by avoiding the need to operate plants that are both dirty and costly; by postponing or avoiding construction of power plants and transmission lines; and by helping the grid to reliably integrate inexpensive and clean renewable energy resources.”

Electricity producers challenged FERC’s Order 745, and a three-judge panel for the U.S. Court of Appeals for the D.C. Circuit Court — in a split 2-to-1 decision — ruled in favor of the challengers.

The Supreme Court is expected to hear oral arguments in the case this fall.

You can find all the briefs in the case here, and read more about both demand response and this case on our website.