Today the National Rural Electric Cooperative Association (NRECA), along with the American Public Power Association, Electric Power Supply Association and the Edison Electric Institute, is challenging the legality of the Federal Energy Regulatory Commission’s (FERC) Order 745 in oral arguments before the U. S. Supreme Court.
NRECA opposes FERC Order 745 on the grounds that in setting the level of demand response compensation, FERC overstepped its jurisdictional authority. Order 745 establishes uniform compensation levels for suppliers of demand response participating in wholesale energy markets. FERC is prohibited by the Federal Power Act from regulating retail rates. The central issue before the Court, therefore, is whether FERC has the authority to regulate demand response or if such regulation is under states’ exclusive jurisdiction.
“Electric cooperatives have aggressively pursued cost savings for consumer-members by offering a wide range of demand response programs; in fact, in 2012, co-ops’ share of total retail electric sales was 11 percent, yet they were responsible for 19 percent of actual peak reduction,” said Paul Breakman, NRECA FERC counsel. “While co-ops strongly support demand response, we challenge FERC’s authority to set demand response compensation levels.”
The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.