On October 20, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) approved a request by FERC to delay finalizing its decision that vacated FERC Order No. 745 regarding demand response compensation for consumers. The D.C. Circuit approved the delay through December 16, 2014. Additionally, it stated that if it is notified of a petition for writ of certiorari filed during the delay, the court will withhold issuance of the mandate finalizing its decision to vacate, pending the Supreme Court’s final disposition.
In May 2014, the D.C. Circuit, in a 2-1 decision, vacated Order No. 745 after determining that it encroached on states’ exclusive rights to regulate retail rates. The majority reasoned that while Order No. 745 could affect wholesale rates, the correlation between wholesale rates and demand response was too indirect to justify FERC jurisdiction. In contrast, the minority stated that demand response was squarely in FERC’s jurisdiction because Order No. 745 only required compensation when demand response resources affected the wholesale electricity market.
On July 7, 2014, FERC petitioned the D.C. Circuit for an en banc rehearing of its decision (see July 11, 2014 edition of the WER), which was denied on September 17, 2014. Shortly thereafter, on September 22, 2014, FERC requested the stay, arguing that the decision would have the potential to affect wholesale electricity market stability and grid reliability, and that its effect should be delayed until after the federal government has considered whether or not it will seek Supreme Court review.
A copy of the D.C. Circuit’s decision can be found here.