Bloomberg Article on Supreme Court Demand Response Case Quotes Chip Cannon
Akin Gump energy regulation, markets and enforcement partner Chip Cannon was quoted in the Bloomberg News article “Billions of Dollars at Stake in Supreme Court Energy Fight,” which discusses an expected Supreme Court decision pertaining to a federal rule that pays factories and office buildings to dim the lights when energy is most needed.
According to the article, power generators may see billions of dollars in new revenue if the court strikes down the rule. The generators, the article notes, say the current payouts, known as “demand response,” are too generous.
Cannon, who spoke at Akin Gump’s recent briefing, “The Global Energy Industry: A Look to the Year Ahead in 2016,” said grid operators accept commitments for the supply of power, or the reduction of energy use, in ascending order with the last bid needed to meet demand setting the auction price. Prices can be suppressed if consumers underbid the generators.
“Participation by demand response providers in the mid-Atlantic capacity auctions in 2014 resulted in a reduction in gross revenues of about $9 billion,” Cannon said. “It’s very, very real for the generators and other market participants.”