The Supreme Court Saves the Smart Grid, But More Battles Loom
An obscure Supreme Court ruling paves the way for people and businesses to earn money with distributed energy technologies.
In a surprising 6-2 decision, the Supreme Court upheld a controversial energy conservation rule from the Federal Energy Regulatory Commission (FERC), the agency that regulates interstate electricity sales.
The rule was one of those arcane pieces of federal policy so complex that even attorneys arguing for and against had difficulty explaining it. Yet this particular decision by the court is one of the most important in the energy world for many years – not because it upheld a particular FERC rule but because the decision seems to tip the balance of power on electricity policy toward the federal government and away from the states.
The breadth of this decision paves the way for a host of new technologies and business models that seem poised to disrupt the usually staid business of electric utilities and usher in a more technologically advanced power grid. At the same time, the ruling sidestepped a number of thorny questions at the heart of state versus federal control over the power grid.
GETTING PAID TO SAVE ENERGY
The FERC rule allows homes and businesses to get paid for energy conservation when demand on the power grid is very high, a practice known as demand response in the electricity business. Demand response has been around for years even before the case was heard by the Supreme Court, and has been credited with keeping power costs down and even with avoiding blackouts.
For example, on hot summer afternoons when the air conditioner load soars, consumers and businesses can sign up for utility programs to turn up thermostats for short periods and, in return, receive a rebate. By arranging to consume less power during those critical times, grid operators can avoid purchasing costly power from very polluting generators.