Enernoc, Inc. v. Elec. Power Supply Ass'n
Headline: Federal power market rules under review as the Court agrees to decide whether FERC can regulate payments for reduced electricity use and whether that rule was arbitrary, affecting wholesale market operators nationwide.
Holding: In this order the Court granted review, limited to whether FERC can regulate market payment rules and whether a court wrongly called the rule arbitrary; the cases were consolidated and one hour was set for argument.
- Gives Court chance to decide who controls market payments for electricity use reductions.
- Could change how operators pay for and recoup demand-reduction payments.
- Affects FERC, market operators, and electricity consumers nationwide.
Summary
Background
The Federal Energy Regulatory Commission (FERC) issued a rule about how operators of wholesale electricity markets pay people or programs that reduce electricity use and then recoup those payments through wholesale rates. A court of appeals said that FERC’s rule was arbitrary and capricious, and parties asked the Court to review that decision. The case was brought up to decide who has the power to set those market-payment rules.
Reasoning
The Court agreed to review two narrow questions: first, whether FERC has authority under the Federal Power Act to regulate market rules that pay for reduced electricity consumption and recover those costs through rates; and second, whether the court of appeals was wrong to call FERC’s rule arbitrary and capricious. The Court granted review limited to those questions, consolidated the related cases, allowed an amicus brief from NRG Energy, and allotted one hour for oral argument. No final decision on the rule’s legality was reached in this order.
Real world impact
The ruling starts a high-level review that could determine who sets payment and recovery rules in wholesale electricity markets. Market operators, utilities, and customers may be affected depending on the Court’s eventual decision. Because this order only grants review and limits the questions, the outcome is not final and could change after full briefing and argument.
Dissents or concurrances
Justice Alito took no part in considering or deciding the motion and petition, a fact the Court noted in its order.
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