On May 23, the U.S. Court of Appeals for the District of Columbia Circuit vacated Federal Energy Regulatory Commission (“FERC”) Order 745, concerning Demand Response. FERC Order 745 established rules for compensating demand response when it participates in wholesale energy markets.   By using the latest information technology, demand response providers have developed cutting edge ways of managing electrical load – saving consumers money, stabilizing the grid, and avoiding brownouts.

In overturning FERC Order 745 in response to a lawsuit brought by power plant operators, the Court denied FERC’s authority to assure the availability of this cost effective, clean, and innovative mechanism for meeting consumer demand and preserving reliability. FERC, the PJM Interconnection and the Maryland Public Service Commission have all stated they will ask the Court for a rehearing “en banc” of this decision.

Advanced Energy Economy, a national business association, supports FERC’s call for a rehearing of the issue.

“Technology has changed so much of all of our lives, but it is just beginning to be used to provide intelligent management of our utility grid,” said Graham Richard, CEO of Advanced Energy Economy. “Advanced energy companies are developing innovative technologies like demand response to manage the electric grid, make energy use more efficient, and generate energy in ways that are affordable, clean and secure. The decision of the Appeals Court has dealt a chilling blow to innovation in demand response programs that save consumers money and make our electrical power system more reliable and resilient. AEE supports FERC’s call for a rehearing of this matter, which is vital for continued progress toward a better energy future.”