Supreme Court Upholds FERC on Managing Electricity Use Through Pricing

"The Supreme Court on Monday ruled that federal regulators may encourage electricity users like schools, hospitals and shopping centers to reduce consumption at peak times in exchange for price breaks. The regulatory approach, known as “demand response,” lowers costs for consumers and lessens the risk of system failures that can cause blackouts.

“That practice arose because wholesale market operators can sometimes — say, on a muggy August day — offer electricity both more cheaply and more reliably by paying users to dial down their consumption than by paying power plants to ramp up their production,” Justice Elena Kagan wrote for the majority in the 6-to-2 decision.

Environmental groups welcomed the ruling. “Demand response programs make energy cheaper, ensure the reliability of the grid, and protect our air and water from fossil fuel pollution,” Casey Roberts, a lawyer with the Sierra Club, said in a statement."

Adam Liptak reports for the New York Times January 25, 2016.