As Timothy Cama explains for The Hill, the court ruled (pdf) that the Federal Energy
Regulatory Commission (FERC) "did not exceed the authority Congress gave
it when it wrote its 'demand response' rule, mandating that electric utilities
pay customers to reduce use during peak demand periods."
In
2011, FERC (the agency that regulates our country's high voltage electric
transmission grid) issued a landmark rule called Order 745, which set
compensation for demand response in wholesale energy markets. Under the rule,
grid operators are required to pay demand response participants the same rates
for reducing energy use as those paid to power suppliers for producing energy
from resources like coal, natural gas, and wind and solar power. FERC said the
rule reflected the common sense view that "markets function most
effectively when both supply and demand resources have appropriate
opportunities to participate.''
With its ruling on Monday, the Supreme Court essentially
affirmed FERC's position—and in turn, gave clean energy "a huge
boost," Clements said in a press statement. That's because,
she explained, "[i]f grid operators can count on fast-acting customer
responses rather than plants that need more advanced notice to come online,
they will have greater flexibility to meet electricity demand in situations
when the sun isn't shining or the wind isn't blowing."
What's more, said Sierra Club staff attorney Casey
Roberts, "demand response programs make energy cheaper, ensure the
reliability of the grid, and protect our air and water from fossil fuel
pollution."
As Politico points out:
The
agency's win is seen as a big loss for large “baseload” power sources like
coal, natural gas and nuclear in the Northeast and parts of the Midwest, which
have seen their profits decline over the last several years as electricity
consumption has eased and renewables grew. Now they have to compete with
industrial customers and others who will at times be paid at market rates to
reduce their electricity use without having the costs of operating and
maintaining a power plant themselves.
"This is a great day for clean energy and the health
of a more affordable, stronger power grid," added Earthjustice managing attorney of
clean energy Jill Tauber on Monday. "Demand response provides tremendous
benefits to our environment, helps consumers save money and makes our
electricity grid more reliable."