Supreme Court takes up appeal over rule that pays energy users to reduce consumption

Energy Associated Press

The Supreme Court will hear a dispute over an electricity regulation in which utilities pay energy users in the wholesale market to reduce consumption.

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The justices said on Monday they will review a lower court ruling that struck down a Federal Energy Regulatory Commission rule under which electricity users are paid to lower energy use in response to rising prices.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that the rule encroaches on state authority to regulate the retail power market. Utilities had opposed the regulation on grounds that it is too generous.

The Obama administration argues that the rule targets the wholesale market. The government says the effect of the rule on wholesale rates is more immediate and direct than any effect on retail consumption.