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Question

How will Judge Ketanji Brown Jackson vote on key FERC orders if they were litigated at SCOTUS?

Rao Konidena's picture
Independent Consultant Rakon Energy LLC

Rao Konidena found Rakon Energy LLC because Rao is passionate about connecting clients to cost-effective solutions in energy consulting, storage, distributed energy resources, and electricity...

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  • Mar 21, 2022
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The Supreme Court Of The United States (SCOTUS) is rarely in the news for matters related to US energy policy, but the district courts are like the DC Circuit Court because the Federal Energy Regulatory Commission (FERC) physically sits in Washington D.C.

With Judge Ketanji Brown Jackson's confirmation hearing in the US Senate, one question on top of my mind is – how will she vote when FERC powers over wholesale energy policies are litigated when seated on the SCOTUS, pending Senate confirmation?

CaptionPhoto by Claire Anderson on Unsplash

This scenario is not a far fetched notion because US Supreme Court appointees are lifetime appointments and because a key demand response compensation issue went all the way to SCOTUS in 2016.

In that landmark decision 6-2, SCOTUS confirmed that FERC has the authority to regulate demand response. In that decision, “Justice Elena Kagan wrote the majority opinion, with Justice Antonin Scalia filing the dissenting opinion along with Justice Clarence Thomas. Justice Samuel Alito abstained.” https://www.greentechmedia.com/articles/read/supreme-court-rules-in-favor-of-demand-response

In the future, if distributed energy resources order 2222 and other FERC orders go all the way up to SCOTUS, how will the new Supreme Court justices vote?

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Rao,

There is a long history with FERC/DR and the efforts by many to designate FERC's guidance as an over reach.  With the supreme court settling that issue, there is now a lot of comparisons to FERC Order 2222.  I'm going to limit this response mostly to 2222 as all energy policy is book worthy vs a post.

As far as 2222 is concerned, the circumstances are dramatically different.  We are now dealing with Distributed Energy Resources (DER's) that produce energy, not just curtail it's use.  And perhaps most importantly, these resources are being adopted at the edge of the grid regardless of this policy.  In Australia, more than 50% of their energy is being supplied by these type of resources now.  Both cost and environmental awareness will continue to increase their level of penetration to the grid and everyone, not just FERC, is searching for the best way they can be incorporated into a safe, affordable, reliable and clean energy infrastructure.  This issue is not being forced by policy, it's being forced by economics and societal realization of environmental pressures our planet is facing.  As such, we all need an answer and 2222 provides a framework to achieve those answers.  

There has been great work done by Commissions, ISO's and Utilities to work cooperatively together to frame this new distributed future.  The efforts being put forward show progress towards a collective goal rather than tens or hundreds of millions spent in litigation and it's great to see the industry come together and recognize this reality and move towards it collaboratively.  I, for one, hope we don't see cases on any docket for this issue.  I hope that we can all stay focused on this new reality and find the best way to realize it.

In terms of other energy policy, the world needs to come to grips with what the key issue are now and stop with the 'sky is falling' arguments that lead us to non-sensical solution.  I believe that in the 20-30 year window that we will have 100MW scale fusion reactors.  I believe this because the world now sees this as a priority and when we put our minds on solving a problem, we tend to solve.  However, that leaves a gap from now until then to make sure we can provide electricity, the lifeblood of our human race today, in an affordable, safe, reliable and clean manner.  If anyone took just a few minutes to consider that we are closing a 20-30 year gap, they would stop shutting down nuclear power plants.  If we care about our environment, we take the problems that exist now off the table.  Those are emissions from fossil.  The 'sky is falling' arguments around nuclear are not logical, even if people want to point to the problems of a few bad actors.  They pale in comparison to the damage of fossil emissions.  I also believe that the waste stream from existing nuclear plants will be mitigated over time.  Is it a risk?  Yes.  Is it manageable?  Yes.  Does this risk pale in comparison to the know effects of fossil emissions?  YES!  

Let's hope policy and legal can be bounded by reality of innovation and technology.  We cannot solve every problem today, but shutting down nuclear and building gas to replace it is simply illogical.  Look at Germany.  Emissions up by double digit amounts after they shut down nuclear.  The author of the the grand plan for Germany publicly admitting it was a failure.  We have to learn from mistakes and realize both the critical issues of today while we plan for tomorrow.

If these issues get to the Supreme Court, it means that the industry and its stakeholders aren't doing a good job of having the necessary conversations to solve these issues.  Probably not the answer you were really looking for, but the legal system isn't the way we solve these issues and while I hope the court will act responsibly, I have greater hopes that the industry and its stakeholders act responsibly so the court doesn't have to get involved.

Rao Konidena's picture
Rao Konidena on Mar 30, 2022

Thanks, Chris for taking some time to answer this question.

I have been following FERC Order 2222 conversations at one grid operator closely, and at two more grid operators, somewhat closely. What I am seeing is, a reluctance to engage in honest discussions about what does it take to allow distributed energy resources to participate in organized markets. Specifically, distribution-connected DERs are already studied for distribution level interconnections. However, distribution utilities want an open-ended "pre-registration" process and another 60-day clock for studying these resources in aggregate. Why? I don't get it.

Another point, some grid operators are reluctant to reduce barriers for DERs because they see FERC Order 2222 as not requiring them to do anything with existing market participation models they currently have demand response for example. So, the end result is even though Order 2222 anticipates DER opportunities to provide operating reserves and other ancillary services from aggregated distributed technologies - we have compliance filings from some ISOs that do not move the needle at all. Those compliance filings look good on paper, grid operators will tell FERC in those filings that they took stakeholder vote and all is good. But at the end of the day - DERs don't have additional opportunities to participate in organized markets compared to what they have today with FERC orders 719, 745, and 841 for electric storage. And that bothers me. That is why I was curious about what would the new SCOTUS Judge do if we end up in a similar situation as we did with the Demand Response order.

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