Full D.C. Circuit Denies Petitions to Reconsider Divided Panel Decision Overturning Vital Clean Energy Protections

(WASHINGTON – September 17, 2014) In a setback for efforts to ensure clean energy resources are properly incentivized in the nation’s electricity markets, the U.S. Court of Appeals for the D.C. Circuit declined, today, to grant rehearing of its May 23, 2014 divided 2-1 panel decision vacating Order 745 of the Federal Energy Regulatory Commission (FERC). Order 745 would have ensured demand response – a voluntary and cost-effective tool that relies on people and technology, not power plants, to meet our country’s rising electricity needs – was fairly valued and able to participate in wholesale electricity markets. The court’s ruling makes it more difficult for demand response to help strengthen our nation’s outdated power grid, reduce harmful air emissions from fossil fuel plants, and keep electricity prices lower. Although the court accepted an amicus brief by Environmental Defense Fund, the Natural Resources Defense Council (NRDC), and the Citizen’s Utility Board (CUB), which argued that FERC had clear authority to adopt Order 745 and advocated for rehearing of the court’s decision invalidating Order 745, a majority of judges ultimately voted against rehearing the order itself.

“Demand response is a critical tool that cost-effectively helps balance our power grid, especially when it is stressed and needs it most during periods of high energy demand. Steps should be taken to encourage, not discourage, demand response by giving it equal opportunity to participate in electricity markets. Today’s court decision comes as a disappointment to clean energy advocates as well as families and businesses looking to lower their electricity bills.” 

FERC should consider next steps to provide the vital grid reliability, cost savings, and clean energy benefits demand response programs can provide our nation, including evaluating further appeal to the U.S. Supreme Court and taking administrative action.  

• Michael Panfil, Attorney, US Climate and Energy Program