Appeals court grants stay on decision to overturn FERC Order 745

Dive Brief:

  • The U.S. Court of Appeals for the District of Columbia Circuit has issued a stay on its decision vacate FERC Order 745. The Federal Energy Regulatory Commission (FERC) requested the stay so it has time to formulate a plan on how to proceed.
  • In May, a three-judge panel from DC Circuit Court of Appeals vacated FERC Order 745. It rejected requests to hear the case en banc in September, effectively killing the agency's demand response rules. The stay, announced Monday, puts the decision to vacate on hold until Dec. 16, when it expires.
  • The decision from the three-judge panel in May stipulated that FERC does not have jurisdiction over demand response markets and compensation, which they designated as individual states' responsibility.  

Dive Insight:

FERC Order 745, issued in 2011, attempted to put demand response on the same playing field as conventional generation resources. The regulatory body sought to enable demand response participate in day-ahead and real-time energy markets when it was capable of balancing supply and demand, and be paid the same locational marginal prices used to value generation. 

In May, a three-judge panel from the US Court of Appeals for the District of Columbia Circuit voided the order, finding that regulation of demand response resources are the realm of the states, not federal agencies. The court in September declined to hear an appeal en banc, leaving demand response proponents with only one other judicial body to appeal to—the Supreme Court.

While the D.C. Circuit Court's decision this week means that Order 745 is technically valid for the time being, demand response providers and local regulators are unlikely to make any changes to demand response planning or current programs, since the ruling vacating the order will soon be reinstated on Dec. 16.

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Filed Under: Efficiency & Demand Response Regulation & Policy
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