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NY Times Covers Legal Battle Over Demand Response

1 min. read

If you are interested in electricity demand response, this New York Times article highlights something you definitely want to keep an eye on. The gist of it is that an ongoing legal fight is pitting "companies that own power plants" against "companies that recruit consumers to unplug themselves when electricity use is high, in exchange for a price break."  What happened is that in 2011, "the Electric Power Supply Association sued the [Federal Energy Regulatory Commission - FERC], saying that demand response should be regulated by the states, not the federal government because the transactions are retail, not wholesale." The deeper concern by the power companies is that demand response reduces "peak prices on their busiest, most profitable days," and "the producers say, they need that income to survive." This past May, "the United States Circuit Court of Appeals in Washington sided with the association."

What happens next? As David Roberts of Grist notes, this post explains "ways that FERC, utilities, and consumers can support demand response even in light of the ruling." Roberts further points out that "[d]emand response is coming, one way or another," but that "this ruling could be a serious stumbling block," possibly "cost[ing] the demand-response industry $4.4 billion in revenue over the next 10 years." So definitely stay tuned for further developments on this case. We'll let you know if we hear anything.

Topics: Public Affairs