Today the Supreme Court ruled in favor of Demand Response programs. From Bloomberg:
FERC’s ‘Demand Response’ Rule Upheld by U.S. Supreme Court
January 25, 2016 — 10:03 AM EST Updated on January 25, 2016 — 10:14 AM EST
The U.S. Supreme Court dealt a blow to power generators, upholding a federal rule aimed at encouraging industrial consumers to cut electricity use.
The justices, voting 6-2, said the Federal Energy Regulatory Commission acted within its authority with the order, which sets rates for an energy-saving practice known as “demand response.” The court also upheld the formula used by FERC.
The ruling is a missed opportunity for the country’s biggest energy generators, which were seeking a chance to widen their profits. A decision invalidating the rule would have benefited NRG Energy Inc., FirstEnergy Corp., Exelon Corp., Dynegy Inc., Talen Energy Corp., Calpine Corp., Public Service Enterprise Group and American Electric Power Co.
Major energy consumers, including aluminum producer Alcoa Inc., backed the rule, as did smart-grid companies such as EnerNOC Inc., which help large consumers reduce their power use.
The case centered on the U.S. Federal Power Act, which lets FERC regulate rates only at the wholesale level and leaves retail regulation in the hands of the states.
Justice Elena Kagan wrote the court’s majority opinion. Justices Antonin Scalia and Clarence Thomas dissented. Justice Samuel Alito didn’t take part in the case because of a stock holding.
FirstEnergy Corp. may not be able to shut down Hatfield’s Ferry and Mitchell power plants in southwestern Pennsylvania by Oct. 9, as the company has previously announced.
The grid operator that schedules electricity for 13 states including Pennsylvania believes that reliability could be compromised if the two coal-fired power stations retire within the next three months.
According to Valley Forge-based PJM Interconnection, the upgrades that would be necessary to the transmission infrastructure to compensate for the lost generation will not be ready by the proposed closing date. Therefore, it’s asking the company to continue operating the plants until reliability issues are addressed.
It’s not yet clear how long that will take.
Ray Dotter, a spokesman for PJM, said the next step is for the grid operator and the company to “identify solutions to the concerns and determine the amount of time required to put the solution into place.”
The Hatsfield’s Ferry plant in Masontown, Greene County, and the Mitchell plant in Courtney, Washington County, together have the capacity to generate about 2,000 megawatts of power.
FirstEnergy spokeswoman Jennifer Young said the company is reviewing PJM’s assessment, but is still going forward with plans to close the plants by Oct. 9.
“We will evaluate the information they have … and continue to have conversations with them,” Ms. Young said.
PJM doesn’t have the authority to force FirstEnergy to keep operating the plants, but no generator has ever denied a request by the grid operator to stay open for reliability reasons.
If FirstEnergy agrees to keep the plants open, it will be compensated for the cost to run them through a transmission charge to PJM customers. The rate will be set by the Federal Energy Regulatory Commission.
Akron, Ohio-based FirstEnergy announced it will shutter the two Pennsylvania plants because demand for electricity is down and plant retrofits would cost the company $275 million to comply with impending environmental regulations.
FirstEnergy cited similar reasons last year when it announced the retirements of nine coal plants, including the Armstrong plant in southwestern Pennsylvania.
Of those nine, however, PJM asked FirstEnergy to continue to operate three plants in Ohio until 2015 to avoid reliability issues. The company agreed to that request.
via Shutdown of two FirstEnergy power plants may be delayed | Electric Power News | Energy Central.