Demand response is “a critical tool for keeping electric prices stable and low, because as prices rise, the reduction in the use of electricity keeps prices from rising too much”, he said.
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The regulation itself has remained in effect while the Supreme Court considered whether it was valid.
Federal law gives authority to the Federal Energy Regulatory Commission, the chief federal regulator of the US power grid, to issue directives governing wholesale power markets, while retail power sales are left to the states.
Melissa McHenry, a spokeswoman for American Electric Power, had no immediate comment by phone Monday on the Supreme Court ruling.
The case is Federal Energy Regulatory Commission v. Electric Power Supply Association.
The U.S. Court of Appeals for the District of Columbia previously held that FERC did not have the statutory authority to impose demand-side management.
“The Supreme Court once again has decided that constitutional federalism must be subordinated to politically correct climate and energy policies”, Myron Ebell, director of the Center for Energy and Environment at the libertarian Competitive Enterprise Institute, told The Daily Caller News Foundation.
Justice Antonin Scalia dissented in a decision joined by Clarence Thomas. And, since demand response is helpful for integrating wind and solar into the grid, it’s “critical for implementing things like the Clean Power Plan and renewable energy standards in a way that keeps electricity prices stable and affordable”.
“We applaud the Supreme Court’s decision and look forward to the continued growth of demand response programs across the country”, said Casey Roberts, staff attorney at the Sierra Club, in a statement Monday.
It also strikes a blow against companies that own large power generation plants who argued that demand response should be regulated by the states – not federal officials. “By not accounting for that huge flaw, FERC’s compensation scheme overpays participants and is a handout to demand response companies”. Justice Elena Kagan wrote the court’s majority opinion.
Only eight justices heard the case; Justice Samuel Alito had recused himself, likely due to his financial interests. “Wholesale market operators administer the entire program, receiving every demand response bid made”.
“I think this is one of the greatest decisions for consumers and for the advancement of the utility grid in this decade”, Wellinghoff added.
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A lower court backed the generators in May 2014.
