Advanced Energy Management Alliance Urges Obama Administration to Appeal Order 745 in Wake of PJM Proposal

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PJM releases report that presents their vision of a post-Order 745 world.

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Empowering Consumers Through Demand Response

Empowering Consumers Through Demand Response

Yesterday, in response to the recent DC Circuit Court decision that vacated Federal Energy Regulatory Commission's (FERC) Order 745 (Electric Power Supply Ass’n v. FERC, D.C. Circuit No. 11-1486), PJM Interconnection released a proposal identifying a potential blueprint for complying with the decision, should the interpretation of that decision include capacity as well as energy markets. This document makes it clear that if the Court's decision is left unchallenged, all electricity consumers could be adversely affected.

As a result of the Court's decision, the PJM proposal presumes that FERC will not retain jurisdiction over demand response in capacity markets. Second, the plan asserts that only a small number of companies can offer demand response programs.

“This vision of a world without a competitive market for demand response is deeply troubling. Many energy companies have a financial interest in selling energy, rather than reducing energy consumption, which demand response incentivizes,” stated Frank Lacey Chairman of AEMA and Vice President Regulatory and Market Strategy at Comverge.

“This clear conflict of interest underscores why it is imperative for the Obama Administration to join demand response providers and consumers in urging the Supreme Court to consider Electric Power Supply Ass’n v. FERC.”

PJM Interconnection has been one of the most aggressive adopters of demand response programs, recognizing the tremendous value it brings to the electric grid while lowering costs for all consumers, reducing greenhouse gas emissions, and increasing reliability to the grid. In fact, demand response and energy efficiency have lowered energy costs in PJM by $16 Billion (PJM Market Monitor, State of the Market 2014, http://www.monitoringanalytics.com/reports/pjm_state_of_the_market/2014/2014q2-som-pjm.pdf), nearly $500 for every household in the 13 states PJM operates. The picture PJM paints of the grid of the future with this report illuminates how truly devastating the Court decision could be and how important it will be for the Department of Justice to take this case all the way to the Supreme Court.

About AEMA:
The Advanced Energy Management Alliance (AEMA) is an association of providers and supporters of demand response united to overcome barriers to nationwide use of demand response for an environmentally preferable and more reliable grid. AEMA advocates policies that empower and compensate customers to manage their energy usage and make the electric grid more efficient, more reliable, more environmentally friendly, and less expensive.

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Katherine Hamilton
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