{"id":8500,"date":"2014-10-21T10:01:49","date_gmt":"2014-10-21T15:01:49","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=8500"},"modified":"2015-12-21T12:43:16","modified_gmt":"2015-12-21T18:43:16","slug":"in-the-wake-of-court-ruling-whats-the-future-of-demand-response","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2014\/10\/21\/in-the-wake-of-court-ruling-whats-the-future-of-demand-response\/","title":{"rendered":"In the Wake of Court Ruling, What\u2019s the Future of Demand Response?"},"content":{"rendered":"

\"supreme<\/a>On September 17th<\/sup>, the D.C. Circuit Court of Appeals declined en banc<\/i> review of Federal Energy Regulatory Commission (FERC) Order 745, dealing a blow to FERC\u2019s regulation on demand response. This sounds complex, but behind these technical terms, hidden in plain sight, is a monumentally important and unfortunate legal outcome: we\u2019re likely about to see an unnecessary rise in electricity prices and increase in new polluting power plants<\/a>. This is bad news for the consumer, bad news for efficiency, and bad news for the environment.<\/p>\n

First, a bit of background\u2026<\/b><\/p>\n

FERC Order 745, issued in 2011 by the federal agency that regulates electricity throughout the United States, has successfully allowed demand response<\/a> to fairly compete in the electricity marketplace with more traditional energy resources like coal and natural gas. <\/b><\/p>\n

Demand response is an important clean energy resource used by utilities and electric grid operators to balance stress on the electric grid by reducing demand for electricity, rather than relying on dirty \u201cpeaker\u201d power plants or new infrastructure. It pays people to conserve energy during periods of peak or high demand in exchange for their offset energy use. This makes our grid more efficient, reduces harmful air emissions from fossil fuel plants, and keeps electricity prices lower.<\/p>\n

In the wholesale energy market, when the electric grid is stressed by demand (like during a heat wave or cold front), energy resources such as coal and demand response are invited to duke it out in the competitive, open marketplace for a chance to \u201cfill the energy capacity gap.\u201d Whichever combination of energy resources is the most readily available at the best price is delivered to homes and businesses. The inclusion of demand response in this wholesale energy market created a level playing field for the resource \u2013 a logical and important step taken by FERC.<\/p>\n

By giving a clean energy resource equal footing with traditional sources of power, FERC was merely allowing an additional option into the marketplace. More options usually results in more competition; more competition usually results in lower cost to the consumer. And this is exactly what has occurred.<\/p>\n

In 2013 alone, for example, demand response saved consumers in the mid-Atlantic region $11.8 billion<\/a>. These savings are now, however, in jeopardy. By declining en banc<\/i> review of the Order, the court has said, in essence, that demand response can no longer participate on equal footing in the marketplace.[Tweet “Decline of @FERC Order 745 review is bad news for the consumer, efficiency, AND the environment http:\/\/ow.ly\/D76ho “]<\/p>\n

A look into the future<\/b><\/p>\n

None of this is good news for demand response, which in turn is bad news for anyone who wants lower electricity bills and cleaner energy.<\/p>\n

So where does demand response go from here? None of the options are certain and some overlap, but let\u2019s look at each possibility.<\/p>\n