Dive Brief:
- PJM Interconnection is joining the Federal Energy Regulatory Commission (FERC) in its call for a full judge panel review of the decision to scrap Order 745 by a D.C. Court of Appeals in May.
- Order 745 made sure that commercial buildings and others who provided demand response services to the grid were paid full market prices for their services, but the court ruled the decision of what to pay these providers was up to the states, not the federal government.
- The results of PJM's capacity auction for 2017-18, which FirstEnergy has asked the grid operator to suspend, include 11,000 MW of demand response services.
Dive Insight:
Demand response makes up an important -- and growing -- part of the power supply.
The final decision on where FERC's authority lies could take years, according to David Dardis, deputy general counsel and vice president at Exelon. "This uncertainty is a problem."
"An unpredictable policy environment risks stalling progress in energy efficiency and demand response," said Michael Gordon, CEO of Joule Assets. This could impact the Environmental Protection Agency's goal of a 30% greenhouse gas emissions reduction by 2030.
The implications of the ruling could go far beyond demand response itself, according to Scott Hempling, an attorney specializing in energy regulation. "If demand side bidders can't participate in organized wholesale markets, FERC has found (in statements the Court left untouched), the generation prices produced by those markets won't be 'just and reasonable,' as required by the Federal Power Act. That means every generating company now risks having its market-based pricing authority revoked, in favor of regulated prices."
