The Supreme Court, in a 6-2 landmark decision issued January 25, 2016, in Fed. Energy Regulatory Comm’n v. Elec. Power Supply Ass’n, 136 S.Ct. 760, 193 L.Ed.2d 661 (2016), upheld FERC Order No. 745 and ruled that the Federal Energy Regulatory Commission (FERC) has authority to establish demand response rules and rates in wholesale power markets. FERC’s rules call for payments to large energy users that reduce their electric usage during periods of high electricity demand.

The Court of Appeals for the District of Columbia Circuit had vacated Order No. 745, ruling among other things that FERC had overstepped its authority and directly interfered with the states’ exclusive right to regulate the retail electricity market.