WASHINGTON (AP) — A federal appeals court has overturned an electricity regulation in which utilities pay energy users in the wholesale market to reduce consumption.
The court ruled 2-1 that the Federal Energy Regulatory Commission rule encroaches on states' authority to regulate the retail power market. Utilities oppose the regulation on grounds that it is too generous.
In an approach known as demand response, electricity users are paid to reduce their consumption in response to rising prices.
The appeals court says demand response is part of the retail market because it involves retail customers, their decision whether to purchase at retail and the levels of retail electricity consumption.