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Supreme Court Rules In Favor of Energy Conservation Program (yahoo.com)
mdsolar sends news that the U.S. Supreme Court has issued a 6-2 ruling in favor of the Federal Energy Regulatory Commission's ability to create incentives for conserving energy and reducing demand on the power grid at peak times.
The demand response program pays large electricity customers like retailers, schools and office buildings to reduce energy consumption on hot summer days and other times of peak demand. The reduction in power use means electric utilities don't need to turn on backup power plants, which cost more to run and boost electricity prices. ... The rule won wide praise from environmental groups because it curbed the need for utilities to build expensive and air-polluting power plants. The demand response program saved customers in the mid-Atlantic region nearly $12 billion in 2013, according to PJM Interconnection, which manages the wholesale power supply for all or part of 13 states. ... But the rule has meant millions in lost profits for utilities. Those companies argued that the program impermissibly targets retail customers.
You do need some price regulations on basic industries. If my neighbor has trouble affording enough electricity, water and phone for basic things (necessary heating, clean water to maintain health, ability to apply for and maintain a job) then it can reduce overall economic production and, indirectly, hurt me personally. Increasing baseline well-being for the country, especially when it has relatively little cost, is absolutely good for economic growth...even when it limits utilities' profits. Sorry not sorry.
And wondered whether it is in people's interest to face electricity tariffs that may vary widely (by a factor of 10 at least, and without warning, like on a stock exchange) between the 15-min time slots in which electric power tends to be bought and sold?
Because that's what would be needed to remove one of the biggest imperfections in the electricity market: fixed consumer tariffs.
Allowing regulatory bodies to incentivise reduced consumption when generation costs go up is actually the simplest, most pragmatic way to remove some of the imperfections from the market. And it *demonstrably* results in quite substantial savings for customers.
Only ... it tends to cost power companies money, which is why they opposed this commonsense measure by legal means, and lost even when they tried to dress up their self-serving objections as "opposition to measures that interfere with the free-market".
Funny how this kind of dogwhistle tactics always brings the more dogmatic "free market" supporters out of the woodwork. Supporters who are clueless about anything to do with the issue at hand (including the market in which the issue arose), but but who are consistently full of empty slogans and over-simplistic arguments.
Because the free market does not work. You are a captive buyer of energy utilities, you have not ability to pick and choose who you buy electricity from. The utilities in turn do not charge their customers solely on the amount of electricity used or cost of infrastructure. The utilities when left to their own devices have shown that they will discourage energy conservation as it cuts into their profits.
They think the free market is a magic bullet. Any market ever has had some interference somewhere so these nutcases can always fall back and claim a true free market could still theoretically work despite all the empirical evidence against it.
The problem to some is that they only look at profits alone. The "substantial savings to customers" is not a concept they want to accept, as they think customers can reduce costs merely by buying from someone else. The government has a vested interest in reducing energy usage despite the loss in profits to some companies, but free market believers don't like externalities because it screws up their naive models. Almost everybody in America gets only one choice of electricity provider, take it or leave it, there is no free market by its very nature. And those utilities will fight viciously against anything that brings in competition (like municipal utilities).