The Supreme Court Rules for Common Sense in Electricity Case

The Supreme Court earlier this week upheld a federal regulation that encourages factories, shopping malls and other users of electricity to reduce their consumption during periods of high demand, like hot summer afternoons. The well-reasoned decision will save consumers money and improve the reliability of the electricity grid.

By a 6-2 majority, the court ruled in favor of the Federal Energy Regulatory Commission in a case brought by a group representing power plants. In 2011, the commission issued a rule applying to the wholesale markets that operate in many parts of the country in which electricity production and distribution are divided into separate businesses. In those markets, which are operated by nonprofit entities, power producers like Exelon sell electricity and utilities like Con Edison buy it to distribute energy to homes and businesses.

In this decision, like in previous rulings upholding pollution regulations issued by the Environmental Protection Agency, the Supreme Court is clearly saying that regulators have broad discretion to enforce federal laws. Their job is not to protect the profits of a segment of an industry. Regulators ought to do what is in the public interest, which is exactly what the energy commission’s rule does.

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