In a rare show of unity in response to a U.S. Circuit Court decision (USCA Case #11-1486) to vacate Order 745–the landmark order from the Federal Energy Regulatory Commission (FERC) –state utility regulators, electric grid operators, demand response providers, industrial consumers, and consumer advocates all filed to request a rehearing en banc in the court, expressing strong support for all types of demand response as a valuable resource to the nation’s electric grid.
“We are encouraged by the number of parties that have been supportive of a rehearing,” stated Katherine Hamilton, executive director of the Advanced Energy Management Alliance. “In addition to these demand response providers and their customers, states like California, Pennsylvania and Maryland as well as the grid system operator, PJM Interconnection, all joined the FERC in requesting that the Court reconsider its decision. “
This court battle, with the original U.S. Circuit Court decision on May 23, pitches incumbent generators against providers of services like demand response that allow consumers to choose to curtail their energy use during times of high demand—and cost—on the electric grid, and be compensated for their flexibility. While states individually can and do offer demand response programs, the ability to use demand response in the wholesale markets has been a powerful economic driver for manufacturers and large commercial customers as well as helping keep costs down for residential consumers.
“During peak hours, electricity is at its most expensive; demand response keeps those peaks down, in turn lowering the cost for all consumers,” continues Hamilton. “Losing the ability to choose to participate in demand response will only serve to make the grid less efficient and more expensive to operate.”
In addition to AEMA, parties publicly supporting rehearing include: Delaware Public Service Commission, New York Public Service Commission, New England Conference of Public Utility Commissioners, Delaware Division of the Public Advocate, Indiana Office of Utility Consumer Counselor, Maryland Office of People’s Counsel, New Jersey Division of Rate Counsel, Pennsylvania Office of Consumer Advocate, Office of the People’s Counsel for the District of Columbia, Public Service Commission of West Virginia Consumer Advocate Division, Advanced Energy Economy, Electric Consumers Resource Council, Industrial Energy Consumers of America, National Electrical Manufacturers Association, New England Clean Energy Council, Massachusetts Attorney General, Northeast Utilities and National Grid.
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 the ruling, the court acknowledged that demand response benefits consumers by lowering wholesale costs and increasing system reliability. Many consumers rely on the value of demand response at the wholesale level to reduce energy costs and retain the cost-effectiveness of their industries, businesses, and home energy management systems.
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.