US appeals court grants FERC stay on Order 745

Tuesday, October 21, 2014

(Oct. 21 from Smart Grid Today) The US Court of Appeals for the District of Columbia Circuit yesterday granted FERC's request for a stay on the decision that vacated Order 745. The commission sought the appeal so it could take more time to consider a path forward.

The stay will be in effect until Dec 16, unless the Solicitor General and the commission file a petition for writ of certiorari for a Supreme Court review of the case. If that happens, the stay would be extended until the Supreme Court renders its final decision (that could come in the form of a denial of the writ).

To get the Supreme Court to review a case, parties generally have to point to a discrepancy in lower court rulings. FERC tipped off its potential hand somewhat in requesting the stay, in saying that Circuit Courts of Appeal in New Jersey and Maryland gave it a much broader grant of jurisdiction than the DC Circuit's ruling (SGT, Sept-25).

Those other cases threw out programs in those two states that sought to build new natural gas generators using "contracts for differences" that paid developers a set rate for capacity by netting out whatever PJM's capacity prices happened to be. That activity was found to invade FERC's exclusive field of jurisdiction over wholesale markets.

The Order 745 case said DR is on the retail, or state side of the "bright line" the Federal Power Act draws between state and federal power, to regulate power.

Order 745 was based on energy markets alone but its broad jurisdictional rulings already had an impact on the future of capacity-market DR with PJM offering a straw-man proposal to remove the resource's direct participation in the market (SGT, Oct-9).

Load-serving entities would bid in demand cuts from their customers that would lower their obligations to buy capacity and those could be augmented by state subsidies under PJM's proposal.

While EnerNOC called PJM's proposal conservative, FirstEnergy has a pending complaint to remove DR altogether from the capacity market. Responses to it are due at FERC this week.

Source:  http://www.smartgridtoday.com/public/US-appeals-court-grants-FERC-stay-on-Order-745.cfm