Power Demand Ruling Sinks Grids Into Regulatory Quagmire

By Keith Goldberg (May 30, 2014, 5:48 PM EDT) -- The D.C. Circuit's recent rejection of a Federal Energy Regulatory Commission rule that consumers be paid for using less power during high-demand periods creates an administrative nightmare for regulators and grid operators and threatens the future of demand response resources in wholesale energy markets, experts say.

A divided three-judge panel on Friday threw out FERC's March 2011 demand response compensation rule, concluding that it violates the Federal Power Act by getting involved in price-setting regulation at the retail level, which is the exclusive territory of the states.

The rule was intended to benefit customers and help the operation and competitiveness of...

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