EnerNOC shares soar on US Supreme Court ruling

Basically, FERC wants companies to make money by not using electricity, at the same monetary rate which somebody can make it by using electricity.

A federal appeals court ruled a year ago that the plan intrudes on state power because it affects the purchasing decisions of retail customers. This seems to me an important step in the process. “The Court has said that there is still a substantial statutory separation between FERC’s wholesale authority and state retail rate-making”, Segal said.

In a 6-2 opinion issued this morning, the high court sided with the Federal Energy Regulatory Commission by reviving the agency’s contentious “demand-response” rule aimed at encouraging energy conservation.

“The Supreme Court once again has decided that constitutional federalism must be subordinated to politically correct climate and energy policies”, Myron Ebell, director of the Center for Energy and Environment at the libertarian Competitive Enterprise Institute, told The Daily Caller News Foundation.

The regulation itself has remained in effect while the Supreme Court considered whether it was valid.

Melissa McHenry, a spokeswoman for American Electric Power, had no immediate comment by phone Monday on the Supreme Court ruling.

“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”, explains Justice Elena Kagan, writing for the majority vote in the 6-to-2 decision.

Justices Antonin Scalia and Clarence Thomas dissented.

Although the disputed FERC rule applied only to the energy market, the case is likely to have ramifications for demand response in the capacity market, which is where generators are paid for commitments to provide power three years in the future.

“This decision allows us to continue realizing billions in annual savings from innovative incentives and business models that ensure we use our electricity system efficiently as we integrate more energy efficiency and renewable energy onto the power grid”, White House spokesman Frank Benenati said.

Justice Samuel Alito took no part in deciding the case. He said the lower court’s ruling had been “holding back companies” and that the Supreme Court ruling will “open up the markets in a very wide way”.

“I think this is one of the greatest decisions for consumers and for the advancement of the utility grid in this decade”, Wellinghoff added.