WASHINGTON, DC (May 23, 2014) – A U.S. Court of Appeals decision today [Download not found]vacated FERC Order 745 – a landmark order that recognized the value of demand response resources in wholesale energy markets – and stated that FERC does not have the jurisdiction to regulate demand response.
This decision is likely to be appealed. If it were to stand, it would significantly increase costs to households, businesses and other energy consumers throughout much of the country. In 2013 alone, demand response saved electricity users in the mid-Atlantic $11.8 billion, according to a report on the market effectiveness of the PJM Interconnection by that region’s independent market monitor. Even the Electric Power Supply Association (EPSA), which appealed Order 745, has “stressed that there is an important role for demand response in wholesale electricity markets.”
“Not only would this decision lead to increased electricity costs for consumers by putting more money in the pockets of power generators, it would also stifle innovation on our nation’s electric grid,” states Jon Wellinghoff, former FERC Chairman and now Strategic Counsel for the Advanced Energy Management Alliance (AEMA).
Demand response benefits consumers, is a proven resource that enables more efficient and cleaner operation of electricity markets, and provides cost savings to everyone who uses electricity. In today’s ruling, the court acknowledged that demand response benefits consumers by lowering wholesale costs and increasing system reliability.
AEMA will continue advocating for consumers to have the ability to participate in demand response programs throughout the nation by educating system operators and federal and state policymakers.
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About AEMA:
The Advanced Energy Management Alliance (AEMA) is an association of providers and supporters of demand response united to overcome barriers to nationwide use of demand response for an environmentally preferable and more reliable grid. AEMA advocates policies that empower and compensate customers to manage their energy usage and make the electric grid more efficient, more reliable, more environmentally friendly, and less expensive.