The United States Supreme Court has granted certiorari (see pg. 2) in FERC v. Electric Power Supply (Nos. 14-840 & 14-841), agreeing to review FERC’s jurisdiction to issue Order No. 745 regulating the price paid to demand response providers who bid into wholesale energy markets, as well as the question whether FERC’s method for pricing demand response was reasonable. The D.C. Circuit held that the Order exceeds FERC’s authority by effectively regulating the retail market and alternatively that the rule requiring RTOs and ISOs to pay demand response providers the full locational marginal price (LMP) for forgone consumption was arbitrary and capricious.
Winston & Strawn filed an amicus brief in support of certiorari on behalf of 14 companies that transmit and distribute electricity in New York, New Jersey, Pennsylvania, and New England. These companies, which together serve over 10 million customers in seven states, were parties to the rulemaking that led to Order No. 745. Although the companies hold different views as to the merits of the LMP rule, they all agreed that FERC had jurisdiction to issue the rule because demand response affects the wholesale energy markets.
Briefing in the case will take place over the summer, argument is expected to be scheduled for late this year, and a decision from the Court is expected by June 2016.