Climate 411

Defending BLM Standards that Reduce Waste, Protect Air Quality

By Peter Zalzal / Published: December 6, 2016

EDF, along with a coalition of health and environmental groups, just filed a motion to intervene in defense of vital new standards that will prevent the wasteful loss of natural resources, save money for taxpayers and tribes, and reduce emissions of dangerous and climate-disrupting pollution.

The Bureau of Land Management’s (BLM) waste prevention standards will reduce venting, flaring, and leakage of natural gas on BLM-managed federal and tribal lands – but they are being challenged in U.S. Federal District Court in Wyoming by oil and gas industry groups and three states.

Federal and tribal lands are an important source of oil and gas production. Together, the amount they produce is the equivalent of five percent of the U.S. oil supply and 11 percent of the U.S. natural gas supply, and generates more than $2 billion annually in royalties.

Unfortunately, oil and gas companies that lease these federal and tribal lands lose substantial amounts of publicly-owned natural gas through unnecessary venting, flaring, or leaking at production sites.

A recent study from ICF International found that in 2013, drilling on federal and tribal lands —mostly in the rural West— leaked, vented, and flared natural gas worth about $330 million. An analysis from the Western Values Project estimates taxpayers could lose almost $800 million over the next decade if wasteful venting and flaring practices continue.

In addition to wasting a public resource, oil and gas companies’ unnecessary venting, flaring, and leakage on federal and tribal lands also poses significant public health and safety risks.

The wasted natural gas is primarily composed of methane – a powerful greenhouse gas, capable of warming the climate at a rate 84 times that of carbon dioxide over a 20-year period.

The leaked, vented, and flared natural gas also emits air pollutants including carcinogens such as benzene, and volatile organic compounds – which contribute to hazardous smog.

BLM’s recently finalized venting and flaring standards deploy common sense, cost-effective, and readily available technologies — already effectively in use in several states across the country — to capture this gas.

The standards yield significant benefits by minimizing the waste of a taxpayer-owned natural resource, and by curbing emissions that contribute to air pollution and climate change, all while helping to create new jobs in methane mitigation. They will save, and put to productive use, up to 56 billion cubic feet of gas a year — enough to supply up to 760,000 households – and will provide millions in additional revenues for taxpayers.

The standards will also cut methane emissions by up to 169,000 tons per year — the equivalent to carbon emissions from as many as 890,000 vehicles.

These benefits will accrue to millions of people across the country, including those living near oil and gas development on federal and tribal lands.

EDF member and New Mexico rancher Don Schreiber has more than 100 oil and gas wells on and near his ranch in the San Juan Basin that will now be covered by the BLM standards. In a declaration supporting EDF’s motion to intervene, he describes the impact of venting, flaring, and leaking from these wells on his family and, in particular, his grandchildren:

Most noticeable is the near-constant smell from leaking wells. … These odors make breathing uncomfortable and often cause us to leave affected areas as quickly as possible. … We worry about [our grandchildren’s] exposure to air pollutants from oil and gas development on the property, and always are careful to keep them away from the wells and above ground pipeline equipment. Protecting our grandchildren from the negative health effects of oil and gas emissions is a constant concern when they come to visit us. (New Mexico rancher Don Schreiber, Declaration)

With the new standards, he anticipates a reduction in the “harmful air pollution near my home and in the state where my family and I live, work, and recreate.” (Declaration)

BLM’s efforts to reduce natural gas waste have broad and cross-cutting support from elected officials and community members across the West. In a recent bipartisan poll of Western states, 80 percent of respondents supported BLM standards to curtail waste of this valuable resource. And, over the course of several years during which the rule was under development, BLM solicited the feedback of community stakeholders, oil and gas developers, and local, tribal and state governments. The final rule is the result of a collaborative and deliberate process and includes changes that reflect this stakeholder input.

Standing in stark contrast to this careful process, industry associations rushed to file legal challenges seeking to overturn the waste prevention rule within 40 minutes after it was released — hardly enough time to read the rule, let alone meaningfully consider its contents.

And in a subsequent filing seeking to block these protections before they become effective, these industry associations put forward a number of flawed claims, not least of which was their suggestion that BLM acted unlawfully because its rule may “only” produce additional annual royalty revenues of $22.4 million — a sum the filing characterizes as “de minimis.”

While $22 million annually may be an insignificant amount for the oil and gas companies litigating to overturn this rule, it has real meaning for infrastructure projects, schools, and communities across the country that stand to benefit from this funding.

It’s unfortunate that some have engaged in reflexive efforts to roll back protections designed to prevent the waste of our nation’s public resources and, at the same time, protect our air quality and climate.

The good news is that BLM’s commonsense standards are firmly rooted in the agency’s manifest authority to minimize waste and to address the harmful health and environmental consequences of oil and gas development on federal lands. We at EDF look forward to vigorously defending these standards in court.

Also posted in Economics, Greenhouse Gas Emissions, Health, Partners for Change, Policy / Comments are closed

Power Companies and States – On Track to Meet Clean Power Plan Goals

By Martha Roberts / Published: September 14, 2016

(EDF Fellow Charlie Jiang co-authored this post)

Oral argument in litigation about the Clean Power Plan is rapidly approaching.

In two weeks – on Tuesday, September 27^th — the U.S. Court of Appeals for the D.C. Circuit will hear argument en banc about the historic measure to limit climate pollution from American power plants. (Argument begins at 9:30 a.m. in Courtroom 20).

As you get ready for the argument, one important development to keep in mind is the rapid expansion of clean energy. A power sector transformation is happening now because low-carbon energy is tremendously cost-effective. Prudent investments in clean energy are helping to create cleaner air and shared prosperity — and they’re also further demonstrating that the Clean Power Plan targets are eminently achievable, and that the rule’s approach builds from existing trends and low carbon generation shifts that are already happening in the power sector.

The Clean Power Plan is a sensible framework to help protect us from the dangers of climate change. As these trends show, it is hardly the “reengineer[ing] of the grid” described by opponents. Many states and major power companies are on track to meet or exceed the Clean Power Plan’s targets — including those that are challenging the Clean Power Plan in court.

Here are a few examples of power companies that are shifting their generation towards low-cost clean energy:

Of American Electric Power’s (AEP) generating capacity, more than half (60 percent) comes from coal — but even AEP is reducing emissions by replacing coal with renewables and natural gas. AEP has already cut carbon dioxide emissions 39 percent from 2000 levels. The company plans to add 5,500 megawatts of wind, 3,000 megawatts of solar, and 3,000 megawatts of natural gas in the coming years. CEO Nick Akins last year noted that the Clean Power Plan could be a “catalyst for the transformation that’s already occurring in our industry.”
Iowa-based MidAmerican Energy has announced a goal to provide 100 percent renewable energy. MidAmerican’s just approved $3.6 billion project to add 2,000 megawatts of wind — called the “largest wind energy project in US history” — will expand wind energy to become 85 percent of the company’s sales. Said CEO Bill Fehrman, “Our customers want more renewable energy, and we couldn’t agree more.” Meanwhile, an executive of MidAmerican’s parent company, Berkshire Hathaway Energy, had this to say about the Supreme Court stay of the Clean Power Plan: “We wish that hadn’t happened… Rather than litigating, we are leading.”
Southern Company, a major generator of coal-fired power, is expanding renewable energy development that would count towards Clean Power Plan compliance. Southern Company and its subsidiaries have added or announced more than four gigawatts of renewable generation since 2012 to its 44 gigawatt fleet. Southern Company subsidiaries are challenging the Clean Power Plan in court.
Xcel Energy reported in a recent SEC filing that its Integrated Resource Plan for subsidiary NSP-Minnesota will “allow for a 60 percent reduction in carbon emissions from 2005 levels by 2030,” and that it “anticipated compliance with the [Clean Power Plan] while maintaining reasonable costs for customers.” In comparison, the Clean Power Plan will reduce carbon emissions from the power sector on average 32 percent below 2005 levels by 2030.
Westar Energy, which serves Kansas, is rapidly reducing emissions — even while it is challenging the Clean Power Plan in court. The company’s 2015 Annual Report states that its fleet’s carbon emissions will fall 36 percent below 2005 levels by 2017 (see page 86 of the report). That already exceeds the national goal under the Clean Power Plan.

Power companies aren’t alone in their race to clean energy. States are continuing to make significant progress towards reducing their power sector emissions and meeting Clean Power Plan targets.

Here are some examples of continued state progress:

Arkansas already reached its 2030 Clean Power Plan compliance target last year, thanks to declining coal use in favor of more renewables and natural gas. An in-depth Arkansas Democrat-Gazette article found that “low natural-gas prices” was the most common reason cited by utility leaders for the decline in coal use.
Arizona is “well positioned” to comply and already on track to meet interim goals under business as usual, according to analysis by Pace Global. Modeling from Arizona State University similarly found that compliance was eminently feasible. The state is continuing to convene meetings to assess compliance options even though the Arizona Corporation Commission is challenging the rule in court.
California released a draft of its Clean Power Plan compliance plan in early August, the first state to do so. A California Air Resources Board spokesman stated that the proposal is “a proof of concept for other states, to demonstrate that this is a program that can be adapted to each state and that can be set up in a way that we can form a regional association.”
Georgia is on track to comply with the Clean Power Plan, especially under Georgia Power Company’s proposed integrated resource plan, which proposes to add much more renewable power.
Louisiana is continuing to plan for compliance. According to Louisiana Department of Environmental Quality Secretary Chuck Carr Brown, “Some of the coal states are saying, ‘Put your pencils down’… I took this as an opportunity to sharpen the pencil — to create something that is going to work for the state of Louisiana.”
Michigan’s Attorney General is fighting the Clean Power Plan in court even though the state “would be largely in compliance” with the rule under expected “business as usual” conditions, according to a recent report by the Electric Power Research Institute.
South Carolina regulators are developing a new state energy plan that will likely include measures to reduce power plant emissions. Although the state has halted official work on the Clean Power Plan and is challenging it in court, these emissions reductions could help the state comply with the rule — and spur economic development, as highlighted in a recent op ed by Frank Knapp, President of the South Carolina Small Business Chamber of Commerce.
This summer the National Association of Clean Air Agencies released a comprehensive report designed to help states develop implementation plans to comply with EPA’s Clean Power Plan. The report includes a complete model state plan submittal that states can adapt or build on as they wish.

Also posted in Clean Air Act, Clean Power Plan, EPA litgation, Greenhouse Gas Emissions, Policy / Comments are closed

Five things you need to know before the Clean Power Plan oral argument

By Martha Roberts / Published: August 18, 2016

alternative-21581_640 The Clean Power Plan oral argument is coming up soon. On September 27, attorneys will present their arguments in front of the full U.S. Court of Appeals for the D.C. Circuit.

EPA and the many supporters of the Clean Power Plan have already filed their written arguments – and so has the coalition of coal companies and their allies that are challenging the rule. (You can read all their submissions here.) And just yesterday, the D.C. Circuit released the final order on the argument’s format and duration.

The Clean Power Plan is America’s first-ever nationwide program to reduce carbon pollution from power plants. It sets eminently achievable carbon emission targets that phase in gradually, in line with current power sector trends, while giving states and power companies tremendous flexibility to determine how best to meet these goals.

As we approach September 27, here are five key facts to keep in mind:

The Clean Power Plan has supporters across the country.

Power companies and state and local officials in forty-one states are supporting the Clean Power Plan in court – either through their state attorney general, a local power company, or a municipality. And there are a lot more supporters as well.

The final submitted briefs reflect a wide array of important perspectives in our society. Supporters of the Clean Power Plan in court include:

Leading businesses. Power companies that produce about 10 percent of our nation’s electricity as well as prominent, iconic businesses including Adobe, Amazon, Apple, Google, IKEA, Mars, and Microsoft
States and municipalities. 18 states and 60 cities, including major cities in states that are litigating against these protections – like Houston, Grand Rapids, and Miami
Consumers Union and other organizations addressing the economic benefits for consumers and low income ratepayers from expansive, low cost clean energy solutions
41 faith communities including the National Council of Churches and the Catholic Climate Covenant
Numerous renewable energy companies that are members of the Advanced Energy Economy, American Wind Energy Association, and Solar Energy Industries Association, which together represent more than 3,000 companies in the advanced energy sector, a $200 billion industry in the United States
25 business associations including American Sustainable Business Council, U.S. Black Chambers, Inc., as well as state associations from West Virginia, Kentucky and Ohio, among others
Current and former members of Congress, including 36 sitting Senators and 157 sitting members of the House
Leading public health associations such as the American Medical Association and the American Academy of Pediatrics
National security experts including former Secretary of State Madeleine Albright and former Secretary of Defense Leon Panetta

The legal and technical foundation of the Clean Power Plan is rock solid.

The Supreme Court has affirmed EPA’s authority to regulate greenhouse gases under the Clean Air Act three times since 2007. In American Electric Power v. Connecticut (2011), the Supreme Court specifically held that section 111(d) of the Clean Air Act – the provision that underlies the Clean Power Plan – “speaks directly” to the regulation of carbon pollution from existing power plants.

EPA exhaustively analyzed the Clean Power Plan to ensure that it was based on the best available technical information and would not compromise the affordability or reliability of our electricity supply. EPA also reviewed millions of comments, received on every aspect of the proposed version.

A range of renowned experts have affirmed the robust legal and technical bases for the Clean Power Plan in amicus brief submissions to the D.C. Circuit, including:

The Institute for Policy Integrity — represented by New York University Law Dean Emeritus Richard Revesz
Former EPA Administrators William Ruckelshaus and William Reilly, who served under Presidents Nixon, Reagan and George H.W. Bush — represented by Harvard Law School’s Jody Freeman and Richard Lazarus
Leon Billings and Tom Jorling — the principal drafters of the 1970 Clean Air Act
Former state energy and environmental officials — including Larry Soward, Commissioner at the Texas Commission of Environmental Quality under Texas Governor Rick Perry
Premier electric grid experts, who affirmed that EPA’s approach is fully in line with on-going power sector trends
Top climate scientists, who articulated the latest research on observed and projected impacts from our changing climate

The tremendous pace of clean energy development further reinforces the Clean Power Plan’s reasonableness.

The cost of renewable energy is falling at an extraordinary rate, spurring dramatic expansion in its use. The cost of new wind power has dropped 60 percent — and the cost of new solar by 80 percent — since just 2009.

Renewable energy is anticipated to make up approximately 63 percent of new capacity additions in 2016. In fact, the amount of new renewable energy capacity developed in the first three months of 2016 exceeded new natural gas by a factor of more than seventy to one. Almost 100 gigawatts of additional new renewable energy resources are now projected in the United States by 2020, and annual investment in energy efficiency has quadrupled in the last decade.

America’s powerful clean energy trends further buttress the feasibility of the Clean Power Plan’s targets. But you don’t have to take our word for it — because power companies have said so themselves.

In their Clean Power Plan filing, major power producers emphasized their strong support for the Clean Power Plan, highlighting that it “harnesses existing trends within the electricity sector” and was set “with ample margin and attention to what is practically attainable.”

As the companies noted, both they and the power sector in general have “have successfully reduced emissions within their generation portfolios without compromising reliability and will continue to do so” under the Clean Power Plan.

Dominion Resources, an owner of several large coal-fired power plants in the Mid-Atlantic, affirmed the feasibility of compliance in a lengthy amicus brief submitted in support of the Clean Power Plan.

States and power companies are charging ahead.

On February 9, 2016, the Supreme Court stayed enforcement of the Clean Power Plan in an unprecedented order. Nonetheless, states and power companies are voluntarily moving ahead, in recognition of the tremendous value in following the Clean Power Plan’s flexible, sensible approach to achieving emissions reductions.

More than half of states are continuing to assess planning options under the Clean Power Plan. 14 states across the country have explicitly requested that EPA continue providing information and guidance to help them make informed decisions about potential Clean Power Plan obligations as they continue moving forward. California developed its proposed Clean Power Plan state plan in a year and released it for public comment earlier this month. State officials across the country have voiced support for sensible continued planning — as one Wyoming state legislator put it, “Wyoming should be prepared.” (See a full compilation of state statements on the Clean Power Plan here.)

Power companies across the country have expressed similar sentiments. A representative from Mid-American Energy highlighted that they “wish” the stay hadn’t happened, because of the resulting uncertainty. American Electric Power, a major producer of coal-fired electricity, said that the Supreme Court stay “doesn’t change our focus on the diversification of our generation fleet,” and those diversification plans include more gas and renewables. Power companies are already investing in clean energy in response to the market and their customers — for these companies, any delay in planning creates needless risk and uncertainty.

This record-breaking summer highlights just how urgently we need sensible climate protections.

It’s challenging to encapsulate all the extreme weather we’ve witnessed in 2016. Just in the U.S., we’ve experienced a series of dangerous heat waves, deadly floods, and extreme storms. This week’s flooding in Louisiana is just the latest heart-rending example — with lives tragically lost and upended across the state. Yesterday, NASA announced that July 2016 was the warmest month ever in 136 years of modern record-keeping. According to the World Meteorological Organization, 2016 is firmly on track to be the warmest year yet. The Weather Channel noted all of these wild weather events from the first six months of 2016 together here, in a website on 2016’s “Weirdest Weather.” All these events are fully in line with the hotter, more extreme weather that’s predicted under a changing climate.

Meanwhile, new research only underscores the human health costs of climate change. Mitigating the human health impacts of climate change will add to the Clean Power Plan’s substantial health benefits from reducing soot and smog pollutants. EPA estimates that once the Clean Power Plan is fully implemented, these reductions will — every year — avoid 3,600 premature deaths, 1,700 heart attacks, 90,000 asthma attacks, and 300,000 missed workdays and schooldays.

These climate risks and essential health benefits highlight the importance of having a mandatory framework to ensure emissions reductions. Clean energy trends are already charging ahead, but investors need the certainty that the Clean Power Plan provides — and all Americans’ health and well-being are depending on it.

Also posted in Clean Air Act, Clean Power Plan, Economics, EPA litgation, Green Jobs, Greenhouse Gas Emissions, Health, Jobs, Policy / Comments are closed

3 Keys for the American Petroleum Institute’s New Climate Task Force

By EDF Blogs / Published: July 21, 2016

By Ben Ratner, Director, EDF’s Corporate Partnerships Program

The climate change discussion is percolating even in surprising places. The latest sign: the American Petroleum Institute’s recent formation of an internal task force on climate change. Reportedly the new task force’s mandate is to revisit API’s approach to this crucial issue, going into an election year and with ever greater scrutiny on fossil fuels.

It is too soon to know whether the task force will rubber stamp a business-as-usual approach defined by glossing over climate concerns and attacking policy measures, or chart a new path instead.

But if the task force is serious about a fresh look at the issue, here are three keys for the task force to consider as it ponders the future of API on climate.

Face the Facts

The oil and gas industry must be responsive to growing pressures from its investors, corporate customers, and Americans affected by oil and gas operations – from local pollution to climate change.

The historic global climate agreement reached in Paris, supported by nearly 200 countries including powerhouses like the United States and China, was also supported by a wide cross-section of American businesses – including PG&E, which as a natural gas distribution company and power generator is a user of API members’ products and a face to climate-conscious consumers.

Last April, over 400 investors representing more than $24 trillion in assets under management urged stronger leadership and more ambitious policies to lessen risk to investment and retirement savings of millions of Americans. Since then, the 2016 investor shareholder resolution season yielded a record breaking number of resolutions – 94 – addressing climate change, many levied as challenges to large oil companies.

And American public concern on global warming is reaching an eight year high, with nearly two-thirds of adults saying they worry about global warming a “great deal” or “a fair amount”, according to Gallup.

Facing all the facts, not cherry-picking them, can ground the task force’s work in today’s dynamic environment and enable an effective response in a changing world.

Solve Methane

While understanding and concern on the methane challenge has snowballed, API’s response has severely lagged.

But it doesn’t have to.

The methane emissions from the U.S. oil and natural gas industry account for the climate damage over a 20-year timeframe equivalent to roughly 240 coal fired power plants. And yet, when the Environmental Protection Agency issued rules earlier this year requiring operators to implement basic safeguards to detect and prevent emissions, API’s public response was to decry new environmental rules as “unreasonable and burdensome”.

Months prior, API’s combative regulatory filing questioned the authority of EPA even to regulate methane emissions, resisted twice-a-year inspections for accidental leaks and urged inspection exemptions that ignore insights on leak unpredictability.

The next round of methane rules is around the corner, and better late than never for API to embrace the United States’ goal of a 45% reduction in methane emissions from the oil and gas sector and to support effective national methane rules grounded in science and economics. Supporting a level playing field to address the invisible but undeniable methane problem would increase investor confidence and keep more product in the pipelines working for the economy, not against the climate. And it just might help build public trust in an industry that according to Edelman lags only the pharmaceutical and financial services industries in that category.

Truth be told, new regulations and compliance are not cost-free, but neither are exploration and drilling. Investing in effective rules will provide climate and environmental safeguards – a needed advancement responsive to legitimate pressure that is only rising.

Support Carbon Pricing

Implementing a market based approach to reducing greenhouse gas emissions is widely thought to be the ultimate key to achieving U.S. climate goals including cutting emissions 80% by 2050. Geographies from northeastern states and California to South Africa and the EU have implemented various forms of carbon pricing. A number of mostly European API members have publicly supported pricing carbon, for example BP recognizing “that carbon pricing by governments is the most comprehensive and economically efficient policy to limit greenhouse gas emissions.”

And yet, some prominent API members have to date withheld support for carbon pricing, or provided lukewarm quasi-endorsements but not lobbying muscle.

The oil and gas industry has survived through evolving, and it’s time to evolve on carbon pricing. An economically rational policy can provide the investment clarity companies want, while delivering the greenhouse gas reductions that societies, supply chains, and ecosystems need.

API is a large organization with diverse views represented, and the climate task force’s job won’t be easy. But the time for change couldn’t be better.

This post first appeared on the EDF + Business Blog

Also posted in Economics, Greenhouse Gas Emissions, Jobs / Read 1 Response

The Bar for Corporate Leadership on Climate Has Been Raised

By Tom Murray / Published: April 5, 2016

As the legal briefings pile up over the Clean Power Plan (CPP), I’m inspired by the growing number of companies and business organizations standing up for the most significant step in U.S. history toward reducing climate pollution.

The bar continues to rise for companies that want to lead on sustainability, and it’s great to see companies aligning their corporate sustainability strategy and policy advocacy. Today’s corporate-led amicus briefs in support of the Clean Power Plan and smart climate policy are the latest example.

IKEA, Mars, Blue Cross Blue Shield MA and Adobe (collectively called Amici Companies) praised the EPA’s Clean Power Plan as a viable solution that will create market certainty and directly benefit their organizations. “It is important to the Amici Companies that they reduce their carbon footprints by procuring their electricity from zero- and low-emitting greenhouse gas (GHG) sources, not only to be good stewards of the environment, but to also because it preserves their economic interests.”

Tech industry leaders Google, Apple, Amazon and Microsoft (collectively called Tech Amici) also threw their weight behind the plan, saying, “delaying action on climate change will be costly in economic and human terms, while accelerating the transition to a low-carbon economy will produce multiple benefits with regard to sustainable economic growth, public health, resilience to natural disasters, and the health of the global environment.”

These leading companies represent half a trillion dollars in revenue, demonstrating robust business sector support for the Clean Power Plan. Their filings continue the important momentum started in July 2015 by 365 companies and investors that sent letters to governors across the U.S. stating their support as being “firmly grounded in economic reality.”

Dynamic power sector voices are supporting the rule as well. Three advanced energy associations, representing a $200 billion industry, have stepped up to intervene in defending the Clean Power Plan. Numerous major power companies are also defending the rule in court: Just today, Dominion Resources filed a brief endorsing the Plan’s “flexible, accommodating” approach.

In fact, leading companies argue that inaction on climate will “subject companies to unacceptable risks” — risks that force businesses to bear economic and social disruptions to their operations due to the uncertainty of future energy resources. Companies who support the Clean Power Plan are major energy consumers and purchasers; planning for future energy resourcing is critical to their long-term business strategy.

Sixty percent of the largest U.S. businesses have established public sustainability and clean energy goals. That’s fantastic, but literally billions of kilowatt hours are still needed to meet renewable energy goals. Companies no longer want to rely on unstable fossil fuels. They are looking to the Clean Power Plan to spur investment and increase reliability, energy efficiency and low-cost clean energy options. Kudos to the industry leaders that are standing up to outdated views and the false choice between business and the environment. Real corporate sustainability leadership takes courage and a willingness to support the smart policy changes required to preserve the natural systems that people and the planet rely on.

I’m looking forward to seeing more businesses follow their lead.

This post originally appeared on our EDF+Business blog.

Also posted in Clean Air Act, Clean Power Plan, EPA litgation, Policy / Comments are closed

The Supreme Court Decides in Favor of a Critical Clean Energy Resource: Demand Response

By Michael Panfil / Published: January 25, 2016

Supreme Court of the United States of America

Today, the Supreme Court issued an important decision in support of a vital clean energy resource: demand response. The case, FERC v. EPSA, revolves around demand response, a resource that helps keep prices low and the lights on, all while being environmentally friendly.

It’s a significant victory for anyone in favor of a cleaner, cheaper, accessible, and more reliable grid. That describes a diverse group — consumer advocates, environmentalists, economists, states, grid operators, and leading legal scholars all filed in support of a critically important and well-designed policy creating access for demand response in wholesale energy markets.

How Demand Response Works

The incredible support for demand response exists because of how the resource works. Demand response reduces energy demand when power is needed most, rather than increasing supply from costly, carbon–emitting fuels. It relies on people and technology, not power plants, to affordably meet our country’s rising electricity needs. Think of it like crowd-sourced energy reductions, helping to reduce costs for everyone by taking the place of very expensive generation.

The Supreme Court Case

The Federal Energy Regulatory Commission (FERC) is the federal agency responsible for keeping our electricity rates “just and reasonable” (that is, fairly priced). FERC created Order 745 to further that goal, with the Order giving demand response access and equal footing in wholesale energy markets, where electricity is bought and sold. It levels the playing field between demand response and traditional sources of electricity, letting the resource compete alongside others.

And demand response has done more than compete – it’s reduced our use of unneeded, costly electricity – the exact type of electricity that should be limited if one wants “just and reasonable” rates.

In a strong, 6-2 decision written by Justice Kagan and joined by Chief Justice Roberts and Justices Kennedy, Ginsburg, Sotomayor, and Breyer, the Supreme Court ruled in favor of FERC, stating that “[w]e will not read [FERC’s authority], against its clear terms, to halt a practice that so evidently enables the Commission to fulfill its statutory duties of holding down prices and enhancing reliability in the wholesale energy market.”

Continuing Demand Response Benefits

The Supreme Court’s decision ensures that demand response will keep providing important benefits — and these benefits are numerous. For example, demand response saved customers $11.8 billion in the mid-Atlantic region of the United States in 2013 alone. It likewise helped avoid blackouts during the polar vortex in 2014. And it gives customers the choice and opportunity to save money – for the grid and themselves – by taking part in demand response programs. All this, while being environmentally friendly and carbon reducing.

Also posted in News / Comments are closed

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