United States Supreme Court

In a dispute involving the a FERC Rule, Order No. 745, section 35.28(g)(1)(v), that requires market operators to pay the same price to demand response providers for conserving energy as to generators for producing it, so long as a net benefits test, which ensures that accepted bids actually save consumers money, is met, the Court of Appeals for the D.C. Circuit's decision vacating the Rule, holding that FERC lacked authority to issue the order because it directly regulates the retail electricity market, and holding in the alternative that the Rule's compensation scheme is arbitrary and capricious under the Administrative Procedure Act, is reversed where: 1) the FPA provides FERC with the authority to regulate wholesale market operators' compensation of demand response bids; and 2) ERC's decision to compensate demand response providers at LMP--the same price paid to generators--instead of at LMP-G, is not arbitrary and capricious.

Appellate Information

• Published 2016/01/27

Judges

• KAGAN

Court

• United States Supreme Court

Counsel