Enernoc, Inc. v. Electric Power Supply Association

Questions presented

SCOTUS records, cert granted 4 May 2015

Whether the Federal Energy Regulatory Commission's jurisdiction over interstate markets for wholesale sales of electric energy under sections 201, 205 and 206 of the Federal Power Act, 16 U.S.C. §§ 824(b)(1), 824d and 824e, provides the Commission with authority to regulate participation in those markets by demand response resources?

Opinion summary

Etalia.ai summary of the majority opinion

The Supreme Court case addressed the Federal Energy Regulatory Commission's (FERC) authority to regulate demand response in wholesale electricity markets. Demand response involves consumers reducing their electricity use during peak periods, and FERC issued Order No. 745 requiring that demand response resources receive compensation equal to the market price for energy, known as locational marginal pricing (LMP). The Electric Power Supply Association challenged this order, arguing that it overstepped FERC’s jurisdiction by intruding into retail electricity sales regulation, which is reserved for states. The Supreme Court ruled in favor of FERC with a 6-2 decision, holding that the order directly affects wholesale rates and thus falls within its regulatory purview under the Federal Power Act. This ruling affirmed FERC's ability to incentivize reduced consumption during peak times through financial mechanisms at the federal level.