On February 19, I posted a blog about the fact that CLF had joined with several state consumer advocates and with other environmental organizations to file an amicus curiæ brief in the United States Supreme Court. CLF and the others are urging the Court to hear an appeal from a D.C. Circuit Court ruling about the legal authority of the Federal Energy Regulatory Commission (FERC) to regulate Demand Response (DR) in wholesale electricity markets.
Since that blog was posted, I have received a number of questions from environmental advocates, legislators, and others about the case. Here are some of the most interesting questions, along with answers. (In order to understand what I am discussing here, you will want to read the earlier post first.)
Question: You said that CLF (and others) are asking the Supreme Court to hear this appeal, but that the Supreme Court has discretion whether or not to accept the case. What are the odds that the Supreme Court will hear the case?
Answer: On the one hand, the Supreme Court gets thousands of these petitions for certiorari per year, and hears only about 70-80 cases per year. Overall, the Supreme Court grants certiorari in about 1% of ordinary, routine cases in which it is asked. On the other hand, the Supreme Court grants certiorari in fully 70% of cases where the Solicitor General urges the Court to take a case, and that is what happened in this case (the SG asked). As I indicated in my Feb. 19 blog, the Solicitor General’s petition for certiorari was one of two separate cert. petitions filed the same day, on January 15.
Question: How come there were two different certiorari petitions filed the same day? What does that mean?
Answer: A group of DR providers (including EnerNOC and others) filed one cert. petition, because they would be harmed if the Circuit Court decision were not overturned. The Solicitor General filed a separate cert. petition on behalf of FERC, saying that FERC would be hurt if its legal jurisdiction were improperly constricted by the Circuit Court’s ruling.
In my earlier blog, I linked to both of the cert. petitions filed on January 15. If you read both of them, you will see that they focus on two very different areas.
The first cert. petition, filed by EnerNOC and other DR providers, focuses on the law. Their legal argument is simple. In 2005, Congress amended the Federal Power Act (FPA) to give FERC authority to regulate DR. Thus, the Circuit Court is wrong when it ruled that FERC lacks authority to regulate DR.
In contrast, the Solicitor General’s brief tells the Court why the case is important and why sound public policy supports the Supreme Court hearing the case: if DR is excluded from the wholesale electricity markets, it will cost ratepayers billions of dollars.
And CLF’s brief points out that if DR is excluded from the wholesale electricity markets, it will result in millions of metric tons of greenhouse gas emissions that could have been easily avoided.
Question: Assuming the Supreme Court hears the case, what is the likely outcome?
Answer: The legal argument that the 2005 amendments to the FPA gave FERC jurisdiction over DR is compelling. Also, when it comes to the merits of a case, the track record of the Solicitor General is excellent. During the time that John Roberts has been Chief Justice, the Solicitor General has been on the winning side of 90% of the cases she has been in. (But note that the SG does not participate in every case before the Supreme Court.)
This is one of those cases in which the legal arguments and the public policy arguments really align on the same side. The only parties who will express a contrary view are the owners of dirty, expensive old fossil fuel generating plants, who stand to lose money if DR continues to play a significant role in wholesale power markets.
Question: Assuming the Supreme Court hears the case, what is the likely timing?
Answer: The decision about whether or not to hear the case will almost certainly be made during the current Supreme Court term, which ends in late June. If the Court does grant cert., the case would be heard and decided in the next term, which begins in early October 2015 and runs through late June 2016.
Question: There have been a lot of controversial Supreme Court decisions in which the Supreme Court has divided 5 to 4. Is this likely to be one of those?
Answer: I don’t think so. The issue of FERC authority is not really one that is susceptible to the familiar liberal-conservative divide. The last time the Supreme Court addressed a similar issue of FERC jurisdiction was 2002. That earlier case was New York v. FERC, 535 U.S. 1 (2002). The issue then was very similar to the issue now – whether FERC had jurisdiction to issue its Order 888. The Court ruled in favor of FERC.
Of the nine Justices who were on the Court in 2002, four are still there today: two liberals (Ginsburg and Breyer) and two conservatives (Scalia and Thomas). All four joined those portions of the Court’s opinion that used expansive language to provide a generous, broad reading of FERC authority under the FPA.
If the Supreme Court does take the case (which I believe is likely, but not certain), I would not be surprised if the ruling in favor of FERC were unanimous. The legal issue is not very complicated. And although some of most widely publicized Supreme Court decisions are decided by a 5-4 vote, even now nearly half of all Supreme Court decisions are unanimous. This could be one of those unanimous decisions.