ORAL ARGUMENT HAS NOT BEEN SCHEDULED 

Nos. 11-1486, et al. 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE DISTRICT OF COLUMBIA CIRCUIT 

ELECTRIC POWER SUPPLY ASSOCIATION, et al., 

Petitioners, 

v. 

FEDERAL ENERGY REGULATORY COMMISSION, et al.,

Respondents. 

On Petition for Review from the Federal Energy Regulatory Commission 

 CORRECTED BRIEF OF AMICI CURIAE ENVIRONMENTAL DEFENSE 

FUND, CITIZENS UTILITY BOARD, AND NATURAL RESOURCES DEFENSE 

COUNCIL IN SUPPORT OF RESPONDENT FEDERAL ENERGY 

REGULATORY COMMISSION 

Vickie L. Patton 

General Counsel 

ENVIRONMENTAL DEFENSE FUND 

2060 Broadway 

Boulder, CO 80302 

Tel. (303) 447-7215 

Email: vpatton@edf.org 

Katherine Mayer Mangan 

MAYER MANGAN, PLC

10755 Scripps Poway Parkway, 

Ste. 367 

San Diego, CA 92131 

Tel. 858-397-6234 

Email: kate@mayermangan.com 

Counsel for Amicus Curiae Environmental Defense Fund*

DATED: September 14, 2012 *Additional counsel listed on inside cover 
ii

Counsel for Amicus Curiae Environmental Defense Fund 

Orijit Ghoshal 

CITIZENS UTILITY BOARD 

309 West Washington, Suite 800 

Chicago, Illinois 60606 

Tel. (312) 263-4282 ext. 124 

Email: oghoshal@citizensutilityboard.org 

Counsel for Amicus Curiae Citizens Utility 

Board 

John N. Moore 

Senior Attorney-The Sustainable 

FERC Project 

NATURAL RESOURCES 

DEFENSE COUNCIL 

2 North Riverside Plaza, Ste. 2250 

Chicago, IL 60606 

Tel. (312) 651-7927 

Email: jmoore@nrdc.org 

Counsel for Amicus Curiae 

Natural Resources Defense 

Council 

Elizabeth B. Stein 

Attorney 

ENVIRONMENTAL DEFENSE FUND 

257 Park Avenue South 

New York, NY 10010 

Tel. (212) 616-1327 

Email: estein@edf.org

John Finnigan 

Senior Regulatory Attorney 

ENVIRONMENTAL DEFENSE 

FUND 

128 Winding Brook Lane 

Terrace Park, Ohio 45174 

Tel. (513) 509-3339 

Email: jfinnigan@edf.org 
iii

CORPORATE DISCLOSURE STATEMENT 

Pursuant to Fed. R. App. P. 26.1 and Circuit Rule 26.1, Amici make the 

following disclosures: 

Environmental Defense Fund. Environmental Defense Fund is a not-for-profit 

organization dedicated to protecting public health and the environment. It does not 

have any outstanding shares or debt securities in the hands of the public nor 

any parent, subsidiary, or affiliates that have issued shares or debt securities to the 

public. 

Citizens Utility Board. The Citizens Utility Board (CUB) is a statutorily created 

non-profit entity organized as a 501(c)(4) for Internal Revenue Service purposes. 

CUB’s mission is to represent the interests of residential and small commercial 

utility customers in state and federal regulatory and judicial proceedings. 

CUB is a membership-funded organization with approximately 100,000 members 

across Illinois. CUB does not have any parent companies, and no publicly-held 

company has a 10 percent or greater ownership interest in CUB. CUB does not 

issue stock. 

Natural Resources Defense Council. Natural Resources Defense Council (NRDC) 

has no parent companies, and there are no publicly held companies that have a 

10% or greater ownership interest in NRDC. NRDC is a national non-profit 
iv

organization committed to the preservation and protection of the environment, 

public health, and natural resources. 

 
v

CERTIFICATE AS TO PARTIES, RULINGS, RELATED CASES, AND 

COORDINATION WITH OTHER AMICI CURIAE 

Pursuant to Circuit Rules 28 and 29, amici curiae submit this certificate: 

Parties, Intervernors, and Amici. Other than amici curiae listed on this brief, 

all parties, intervenor, and amici appearing before this Court are listed in the 

Opening Brief of Petitioners Electric Power Supply Association, et al.

 Agency Action_Under Review. The orders under review are Federal Energy 

Regulatory Commission Orders 745, 134 FERC ¶ 61,187 (Mar. 15, 2011), and 

Order 745-A, 137 FERC ¶ 61,215 (Dec. 15, 2011). 

 Related Cases. Electric Power Supply Ass’n v. FERC, No. 12-1306 (D.C. 

Cir., filed July 16, 2012) has been held in abeyance pending the outcome of this 

case. 

 Coordination with Other Amici. Pursuant to Circuit Rule 29(d), Amici 

hereby state that they are not aware of any other amicus curiae parties supporting 

FERC. 

 Respectfully submitted, 

Katherine Mayer Mangan 

MAYER MANGAN, PLC

10755 Scripps Poway Parkway, Ste. 367 

San Diego, CA 92131 

Tel. 858-397-6234 

Email: kate@mayermangan.com 

/s/ Vickie L. Patton

Vickie L. Patton 

General Counsel 

ENVIRONMENTAL DEFENSE 

FUND 

2060 Broadway 

Boulder, CO 80302 

Tel. (303) 447-7215 

Email: vpatton@edf.org 
vi

Elizabeth B. Stein 

Attorney 

ENVIRONMENTAL DEFENSE FUND 

257 Park Avenue South 

New York, NY 10010 

Tel. (212) 616-1327 

Email: estein@edf.org 

John Finnigan 

Senior Regulatory Attorney 

ENVIRONMENTAL DEFENSE 

FUND 

128 Winding Brook Lane 

Terrace Park, Ohio 45174 

(513) 509-3339 

email: jfinnigan@edf.org 

Counsel for Amicus Curiae Environmental Defense Fund

Orijit Ghoshal 

CITIZENS UTILITY BOARD 

309 West Washington, Suite 800 

Chicago, Illinois 60606 

Tel. (312) 263-4282 ext. 124 

Email: oghoshal@citizensutilityboard.org 

Counsel for Amicus Curiae Citizens Utility 

Board 

John N. Moore 

Senior Attorney-The Sustainable 

FERC Project 

NATURAL RESOURCES 

DEFENSE COUNCIL 

2 North Riverside Plaza, Ste. 2250 

Chicago, IL 60606 

Tel. (312) 651-7927 

Email: jmoore@nrdc.org 

Counsel for Amicus Curiae 

Natural Resources Defense 

Council 

 
TABLE OF CONTENTS 

I. Interest of Amici Curiae ....................................................................................... 1 

II. Background.......................................................................................................... 3 

A. How Wholesale and Retail Electricity Markets Work ..................................... 3 

B. Demand Response in the Wholesale Markets .................................................. 6 

C. Orders 745 and 745-A ...................................................................................... 8 

III. Summary of Argument ....................................................................................... 9 

IV. Argument ..........................................................................................................12 

A. FERC Has Jurisdiction Because the Orders Regulate Transactions in the 

Wholesale Markets, Not Retail Sales or Other Retail “Services” Reserved to the 

States .....................................................................................................................12 

B. Demand Response Should Be Compensated at LMP 

Because Demand Response Affects Wholesale Rates and Encouraging Demand 

Response Provides Energy, Public Health, and Environmental Benefits ............17 

1. Compensating Demand Response at LMP Will Encourage 

 Its Development ..........................................................................................18 

2. The Value of Demand Response Is At Least as High, 

 If Not Higher, Than Supply Because It Reduces 

 Externalities and Social Costs ...................................................................20 

V. Conclusion .........................................................................................................28 
ii

TABLE OF AUTHORITIES 

Cases

B & J Oil and Gas v. FERC, 353 F.3d 71, 75 (D.C. Cir. 2004) ..............................17 

Chevron U.S.A., Inc. v. Natural Resources Defense Council, 

 467 U.S. 837, 843 (1984) .....................................................................................13 

Electricity Consumers Resource Council v. FERC, 

 407 F.3d 1232, 1236 (D.C. Cir. 2005) .......................................................... 17, 19 

Elizabethtown Gas Co. v. FERC, 10 F.3d 866, 872 (D.C. Cir. 1993) .....................20 

FPC v. Conway Corp., 426 U.S. 271, 276-277 (1999) ............................................13 

Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 

 487 U.S. 354, 357 (1988) .....................................................................................15 

*New York v. FERC, 535 U.S. 1, 19 (2002) ................................................ 13, 15, 16 

Statutes

5 U.S.C. § 706 ..........................................................................................................17 

*

16 U.S.C. § 824 (Federal Power Act § 201) .............................. 4, 6, 7, 9, 12, 13, 16 

*

16 U.S.C. § 824d (Federal Power Act § 205) ................................................ 4, 9, 13 

*

16 U.S.C. § 824e (Federal Power Act § 206) ........................................... 4, 7, 9, 13 

Other Authorities

Ade Dosunmu, Up in Smoke: Seven Gigawatts of Coal Retrenches from PJM, 

Energy Pulse (August 5, 2011) .............................................................................24 

DeWayne Todd, Summary Remarks, Panel Discussion—Demand Response in 

Organized Markets—Barriers to Comparable Treatment and Solutions to 

Eliminate Potential Barriers (May 21, 2008) ......................................................25 

 

* Authorities upon which we chiefly rely are marked with asterisks.
iii

U.S. Dep't of Energy, Energy Info. Adm., Annual Energy Outlook 2008: With 

Projections to 2030 (2008) ...................................................................................27 

ENERNOC, Demand Response: A Multi-Purpose Resource For Utilities and Grid 

Operators (2009) ................................................................................................... 7 

ERCOT, New Report Reinforces Future Electric Resource Adequacy Concerns 

(May 22, 2012) .....................................................................................................22 

FERC, A Guide to the FERC Electric Transmission Facilities Permit Process 

(updated Sept. 2010) .............................................................................................26 

FERC, National Assessment of DR Potential (June 2009) ......................................22 

Michael Milligan and Brendan Kirby, Utilizing Load Response for Wind and Solar 

Integration and Power System Reliability,” Presented at WindPower 2010 

Dallas, Texas, May 23–26, 2010 ..........................................................................26 

MIT, Future of the Electric Grid (2011) ...................................................... 4, 21, 25 

National Academies of Sciences Committee on Health, Environmental, and Other 

External Costs and Benefits of Energy Production and Consumption; National 

Research Council, et al., The Hidden Costs of Energy: Unpriced Consequences 

of Energy Production and Use .............................................................................23 

Oak Ridge National Laboratory, Climate Change and Energy Supply Use: 

Technical Report to the U.S. Department of Energy in Support of The National 

Climate Assessment (2012) ..................................................................................27 

Richard J. Pierce, Jr., A Primer On Demand Response and a Critique of FERC 

Order 745, Journal of Energy & Environmental Law, Winter 2012 ..................... 6 

Shelley Welton, MIT Study Demonstrates Demand Response’s Role in Balancing 

Renewables, Columbia Law School Climate Law Blog (December 15, 2011) ...24 

The Brattle Group, ERCOT Investment Incentives and Resource Adequacy (June 1, 

2012) .....................................................................................................................22 

The Electric Energy Market Competition Task Force, Report to Congress on 

Competition in Wholesale and Retail Markets for Electric Energy ....................... 6 

U.S. Dep’t of Energy, Benefits of Demand Response in Electricity Markets and 

Recommendations for Achieving Them (February 2006) .....................................21 
iv

U.S. Dep’t of Energy, National Transmission Grid Study (May 2002) ..................20 

Regulations

18 C.F.R. § 35.28 ....................................................................................................... 7 

Administative Cases

*Demand Response Compensation in Organized Wholesale Energy Markets, 

Order No. 745, Final Rule, FERC Stats. & Regs. ¶ 31,322 (2011), 

on reh’g and clarification, Order No. 745-A, 

137 FERC ¶ 61,215 (2011).......................................... 1, 3, 5, 7-9, 12, 13-14, 16, 

19, 20, 25, 27

In re PJM Interconnection, L.L.C., 139 FERC ¶ 61,031 at 2-3 (2012). ..................22 

 
v

GLOSSARY OF ABBREVIATED TERMS

FERC Federal Energy Regulatory Commission 

FPA Federal Power Act 

Generators Petitioners Electric Power Supply Association, American 

Public Power Association, National Rural Electric 

Cooperative Association, Old Dominion Electric 

Cooperative and Edison 

Electric Institute 

ISO Independent System Operator 

LMP Locational Marginal Price: the market clearing price, as 

calculated by a System Operator at a particular node within 

the System Operator’s market footprint 

Order 745 Demand Response Compensation in Organized Wholesale

Energy Markets, Order No. 745, Final Rule, FERC Stats. & 

Regs. ¶ 31,322 (Mar. 15, 2011) 

Order 745-A Demand Response Compensation in Organized Wholesale

Energy Markets, Order No. 745-A, Order on Rehearing and 

Clarification, 137 FERC ¶ 61,215 (Dec. 15, 2011) 

RTO Regional Transmission Organization 
1

Amici curiae Environmental Defense Fund (EDF), Citizens Utility Board 

(CUB), and Natural Resources Defense Council (NRDC) respectfully submit this 

brief in support of respondent Federal Energy Regulatory Commission’s (FERC’s) 

Orders 745 and 745-A.2

I. INTEREST OF AMICI CURIAE3

EDF. EDF is a national non-profit, non-governmental, non-partisan 

organization, representing more than 300,000 members and supporters. Since 

1967, EDF has linked science, economics, law, and innovative private sector 

partnerships to create breakthrough solutions to the most serious environmental 

problems. To that end, EDF advocates ways to deploy smart grid technologies to 

hasten our nation’s transition to a cost-effective, clean energy future. EDF is 

actively working to foster policies that open electricity markets to entrepreneurs 

and that encourage the innovation and deployment of cost-effective clean energy 

resources, including flexible demand. Orders 745 and 745-A create incentives to 

reduce peak demand, which will increase the reliability and security of the 

 

2 Demand Response Compensation in Organized Wholesale Energy Markets, Order 

No. 745, 76 Fed. Reg. 16,658 (Mar. 24, 2011), FERC Stats. & Regs. ¶31,322 

(2011), reh’g denied, Order No. 745-A, 137 FERC ¶61,215 (Dec. 15, 2011). 

3 Pursuant to F.R.A.P. 29(c)(5), amici certify that no counsel for any party authored

this brief in whole or in part and that no counsel or party made a monetary 

contribution intended to fund the preparation or submission of this brief. No amici 

were compensated for their participation in this brief. No person, other than the 

amici, their members, and their counsel, contributed money intended to fund 

preparation or submission of this brief. 
2

electricity grid while reducing emissions of numerous health-harming air 

pollutants. EDF, therefore, has an interest in the outcome of the case. It 

participated in the underlying FERC rulemaking,4

 and it supports FERC's Orders. 

CUB. CUB advocates for just and reasonable rates on behalf of residential 

and small business electricity consumers in Illinois. CUB is interested in the 

proper compensation for demand response because it reduces the overall price of 

electricity, increases competitiveness in generation resource ownership, and 

improves system reliability. 

NRDC. Natural Resources Defense Council (NRDC) is a national nonprofit membership organization with more than 350,000 members. NRDC is 

committed to the preservation and protection of the environment, public health, 

and natural resources. Addressing the climate change crisis is one of NRDC’s top 

institutional priorities. As part of its work in this arena and to curb air pollution, 

NRDC has been actively involved in advocacy related to regulation of greenhouse 

gas emissions, energy efficiency, and renewable energy. Since the mid-1990s, 

NRDC has housed the Sustainable FERC Project, a coalition of public interest 

groups focused on regional transmission and wholesale markets with the goal of 

 

4 EDF filed comments dated October 13, 2010, and joined in joint comments of 

Public Interest Organizations dated May 13, 2010, in FERC docket RM10-17.
3

integrating renewable and demand-side resources into the transmission grid and 

leveling the playing field for all interconnecting resources. 

NRDC has for many years advocated before FERC, as well as regional 

transmission planning entities and state siting and regulatory authorities. Acting 

through the Sustainable FERC Project, NRDC submitted comments to FERC on 

the proposed rule that became Order 745. NRDC and its Sustainable FERC 

Project also have participated in RTO proceedings involving implementation of 

Order 745. 

Amici Curiae file this brief pursuant to a pending Motion for Leave to File 

an Amici Curiae Brief in Support of Respondents, filed herewith. 

II. BACKGROUND 

A. How Wholesale and Retail Electricity Markets Work 

To understand why demand response is integral to the reliable and costefficient operation of the electrical system, it is helpful to have a basic 

understanding of both the physical characteristics of electricity and the electricity 

markets that exist in many areas of the country. One of the most significant 

challenges, and one that affects the need for demand response, is that electricity is 

difficult and costly to store in large amounts.5

 This means that the electric grid 

 

5

See generally MIT, Future of the Electric Grid app. B, p. 254 (2011), available at 

http://web.mit.edu/mitei/research/studies/the-electric-grid-2011.shtml. 
4

operators must continuously balance the supply of electricity with consumer 

demand on a second-to-second basis. Id. 

Generally speaking, in many parts of the country, wholesale markets 

balance supply and demand as follows. Sellers in the wholesale markets are 

generators of electricity and buyers are utilities or other load-serving entities that 

will re-sell electricity to consumers. Id. at 259. The wholesale markets usually are 

administered by independent system operators (ISOs) or regional transmission 

organizations (RTOs) and are regulated by FERC. See Federal Power Act (FPA) 

§ 201(b), 16 U.S.C. § 824(b) (granting FERC jurisdiction over wholesale sales of 

energy); FPA §§ 205, 206, 16 U.S.C. §§ 824d, 824e (granting jurisdiction over 

wholesale rates and charges, as well as over rules, regulations, practices and 

contracts affecting wholesale rates). 

The process of selling wholesale electricity in a regional day-ahead and realtime energy market begins when generators bid into the wholesale markets, stating 

the prices at which they are willing to sell electricity during specific periods of 

time.6 The ISO/RTO accepts the offers (i.e., tells suppliers to generate electricity) 

from lowest to highest price until the demand has been met, that is, until the 

“market clears.” FERC Order 745 ¶ 51. In the day-ahead markets, the clearing 

price for a given hour-long period is set at the price of the lowest marginal cost 

 

6

See, e.g., MIT, The Future of the Electric Grid app. B at 258.
5

resource necessary to meet the hour’s total energy demand (load). The entire dayahead market is cleared hourly, and all generators are paid the market clearing 

price regardless of their actual cost to run. The hourly clearing prices are called 

locational marginal prices (LMPs). See, e.g., Demand Response Supporters Aug. 

30, 2010 Reply Comments (Kahn Affidavit at 2). 

The following day, in the real-time market, the RTO dispatches sufficient 

energy each hour (and at small increments within each hour) to meet customer 

demand, moving up the dispatch stack starting with the least costly power needed 

to meet demand. Each RTO has procedures in place to ensure sufficient energy is 

dispatched to meet real-time, security-constrained operating conditions. This 

process achieves real-time balance of supply and demand: the RTO/ISO 

dispatches just the amount of supply needed to match the expected demand at a 

given moment. Order 745 P 49. 

Because supply bids are organized in ascending order—from lowest to 

highest—the higher the demand, the higher the price that will clear the market. 

When demand is extremely high, usually on hot summer days, the wholesale price 

can skyrocket. In one extreme example, wholesale prices in California, which 

usually were about $27 per megawatt hour, spiked to $450 per megawatt hour.7

 

 

7

See generally, The Electric Energy Market Competition Task Force, Report to 

Congress on Competition in Wholesale and Retail Markets for Electric Energy, at 

28 available at http://www.ferc.gov/legal/fed-sta/ene-pol-act/epact-final-rpt.pdf.
6

Utilities that purchased electricity on the wholesale market re-sell that 

electricity in retail transactions to the consumers they serve. States regulate these 

retail energy sales. See FPA § 201(b), 16 U.S.C. § 824(b). Retail energy prices 

are more stable than the volatile wholesale prices because retail prices are 

generally based on the average annual cost of serving the consumer.8 Thus, while 

the wholesale price may rise dramatically during times of peak demand, the retail 

price may remain lower, meaning that end-users do not necessarily pay a higher 

price even when demand peaks and the cost of serving the retail consumer at that 

moment exceeds the retail price. This discrepancy between how prices are set in 

the wholesale and retail markets affects consumers’ incentive (or lack thereof) to 

conserve. See generally, Richard J. Pierce, Jr., A Primer On Demand Response 

and a Critique of FERC Order 745, Journal of Energy & Environmental Law, 

Winter 2012, at pp. 102, 103. 

B. Demand Response in the Wholesale Markets 

Demand response programs provide a more open energy market that allows 

participation by cost-effective conservation of electricity when meeting demand is 

particularly expensive. These programs can reduce consumers’ electric 

 

8

See generally, The Electric Energy Market Competition Task Force, Report to 

Congress on Competition in Wholesale and Retail Markets for Electric Energy, at 

45 available at http://www.ferc.gov/legal/fed-sta/ene-pol-act/epact-final-rpt.pdf

(explaining that retail electricity rates are based on annual (or multi-year) average 

costs).
7

consumption during periods of peak demand or high prices by providing payment 

or other incentives to reduce consumption of electricity. See, e.g., 18 C.F.R. 

§ 35.28(b)(4). Demand response programs can exist in either the retail or the 

wholesale markets, but Orders 745 and 745-A address only demand response in the 

wholesale markets because FERC’s jurisdiction extends only to wholesale markets. 

See FPA §§ 201, 206, 16 U.S.C. §§ 824, 824e; Order 745 P 114; Order 745-A P 

32. 

In the wholesale markets, providers of demand response often are large 

industrial or commercial customers or companies that act as third party 

“aggregators” of smaller commercial and residential customers.9

 These wholesale 

providers of demand response are the entities that will be compensated under 

Order 745 and 745-A. 

Regardless of who provides demand response or the nature of the demand 

response program, all consumers purchase their electricity on the retail market. 

Even large industrial consumers that act as demand response resources in the 

wholesale market purchase electricity on the retail market. Thus, a large industrial 

consumer may act in two capacities. In one capacity, it is a consumer who 

purchases electricity on the retail market; in a different capacity, it is a demand 

 

9 ENERNOC, Demand Response:A Multi-Purpose Resource For Utilities and Grid 

Operators 2 (2009), available at

http://www.enernoc.com/images/whitepapers/pdfs/drmultipurpose.pdf. 
8

response provider in the wholesale market that has the right to bid into the dayahead and real-time energy markets. 

C. Orders 745 and 745-A 

Due to several major barriers, demand response resources have not been 

fully deployed in the wholesale markets and do not play a significant role in setting 

LMP. Order 745 P 57; see also Demand Response Supporters, Reply Comments at 

9 n.29 (Aug. 30, 2010) (citing a U.S. Department of Energy calculation that, in 

2008, demand side management programs comprised only 2% of the market). 

FERC identified some of the most critical barriers as being lack of a direct 

connection between wholesale and retail prices, lack of real-time information 

sharing and lack of market incentives to invest in enabling technologies that allow 

consumers and aggregators of retail consumers to see and respond to changes in 

marginal costs of providing electric services as those costs change. Order 745 P 

57; see also, Order 745 P 47; Order 745-A PP 72-75. 

With Orders 745 and 745-A, FERC seeks to reduce the barriers to demand 

response in the wholesale markets. Order 745 at PP 113, 115. The Orders require 

ISO/RTOs to pay demand response resources (that is, the larger industrial and 

commercial consumers who can participate directly in the wholesale markets and 

aggregators of smaller electricity consumers) for the demand response services 

they provide. The Orders require payment of LMP, the same price paid to 
9

suppliers, because demand response and supply provide a comparable service to 

the market: both help balance supply and demand. Payment is required only when 

the demand response resource has the capability to balance supply and demand and 

when dispatch of that demand response resource is cost-effective under the net 

benefits test. Order 745 Summary, PP 48, 50. 

III. SUMMARY OF ARGUMENT 

1. FERC permissibly construed the Federal Power Act as granting it 

jurisdiction over demand response compensation in wholesale markets. Order 745 

PP 112-113 (citing FPA §§ 201, 205 206); Order 745-A PP 20-35. The FPA 

unambiguously grants FERC authority over practices affecting wholesale rates. 

FPA §§ 201, 206, 16 U.S.C. §§ 824, 824e (granting FERC authority over “any 

rule, regulation, practice or contract affecting such [wholesale] rate”). Wholesale 

demand response is such a practice, and no party contends otherwise. 

The petitioning Generators,10 however, argue that the FPA reserved to the 

States authority over retail sales of electricity, and that precludes FERC from 

exercising its jurisdiction over demand response even though demand response 

affects wholesale energy rates. Paying compensation to demand response 

providers in the wholesale markets is not a retail sale of electricity. The 

 

10 “Generators” refers to Petitioners Electric Power Supply Association, American 

Public Power Association, National Rural Electric Cooperative Association, Old 

Dominion Electric Cooperative, and Edison Electric Institute. 
10

transaction FERC seeks to regulate is the payment by wholesale market 

administrators for a service provided on the wholesale market, which helps balance 

wholesale supply and demand and which reduces wholesale rates. 

Payment for demand response services in the wholesale markets is not 

somehow transformed into a “retail service” simply because retail consumers are 

involved. An entity may be a retail consumer in one capacity, when it purchases 

electricity from a utility, and also be a wholesale demand response resource (or 

part of a third party aggregator) in another capacity when it makes a demand 

response bid into a wholesale energy market. Retail sales, the transaction the FPA 

clearly reserves to the States, are not regulated by Orders 745 and 745-A. The 

regulated transaction is a wholesale transaction: wholesale market administrators 

compensate demand response resources for the service they provide to wholesale 

markets. The regulated transaction is not a retail sale. 

2. FERC’s decision to require compensation at the LMP should be 

sustained. FERC appropriately considered real-world markets, the full value of 

demand response, and reasonably relied upon a substantial body of expert 

economic opinion in finding that LMP is the appropriate compensation. The Court 

should defer to FERC’s decision. 

Compensating demand response at LMP, and not at a lower level, is a policy 

decision, necessary because of the economic, social and environmental benefits of 
11

demand response. Demand response resources can lower peak wholesale prices 

that affect all consumers. Indeed, FERC’s net benefits test provides that demand 

response resources will receive full LMP only if the wholesale peak price 

reductions exceed the amount paid to the demand response providers. Demand 

response resources also can reduce the social and environmental costs of meeting 

peak demand. These “externality” costs are not reflected in wholesale prices of 

power generators but impose real costs on affected communities. The plants used 

to meet peak demand are often the least efficient, most expensive, and highest 

emitting plants, so avoiding their use produces tremendous societal benefit. 

Demand response resources can also facilitate the integration of lower-cost 

renewable resources into the electricity grid, thereby reducing the clearing price of 

clean electricity generation resources. In short, to fully value demand response 

resources and to encourage their development, LMP—not LMP minus the retail 

price—is the appropriate compensation. Indeed, not deducting the retail price is 

entirely reasonable because full LMP treats supply and demand resources 

comparably for providing comparable services to the wholesale markets. 
12

IV. ARGUMENT 

A. FERC Has Jurisdiction Because the Orders Regulate 

Transactions in the Wholesale Markets, Not Retail Sales or Other 

Retail “Services” Reserved to the States 

There is no challenge to FERC’s position that the FPA grants it authority 

over practices that affect wholesale rates, Gen. Br. 30, nor is there a challenge to 

FERC’s factual finding that wholesale demand response directly affects wholesale 

prices. Order 745 PP 112-115; Order 745-A PP 22-24. 

Instead of challenging FERC’s position that wholesale demand response 

programs are practices affecting wholesale rates, Generators try another approach. 

They argue that the FPA prohibits FERC from regulating “retail services”—a 

manufactured term not found in the law—and other transactions subject to 

regulation by the States. See generally Gen. Br. 28. Generators’ argument is 

flawed. 

Contrary to Generators’ claims, Congress did not assign the States 

jurisdiction over “retail services.” Instead, Congress focused on sales. It assigned 

FERC jurisdiction over wholesale sales of electricity and interstate transmission, 

along with ensuring that wholesale rates and practices are reasonable. FPA §§ 201, 

205, 206, 16 U.S.C. §§ 824, 824d, 824e. It excluded from FERC’s jurisdiction 

“any other [i.e., non-wholesale] sale of electric energy.” FPA § 201(b)(1), 16 
13

U.S.C. § 824(b)(1) (emphasis added).11 Neither the FPA nor any case that 

Generators cite excludes “retail services,” whatever those may be, or “retail 

customers” from FERC’s jurisdiction. Gen. Br. 31 (citing FPC v. Conway Corp., 

426 U.S. 271, 276-277 (1999); Gen. Br. 28 (citing New York v. FERC, 535 U.S. 1, 

19 (2002)). 

FERC carefully tailored its action to address wholesale demand response. 

The question is whether FERC’s construction of the FPA as granting it jurisdiction 

over this wholesale demand response is permissible. See, e.g., Chevron U.S.A., 

Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843 (1984). It is. 

The unchallenged factual findings of FERC establish that the regulated 

transaction is a wholesale transaction that affects wholesale generation rates. The 

relevant transaction is the payment of LMP to a wholesale demand response 

provider (assuming the net benefits test is met) for the service it provides to the 

energy market. See Order 745, Summary. The payer is the administrator of the 

wholesale market, over which FERC has jurisdiction. Order 745-A P 28. The 

 

11 Though not at issue here, the FPA also excludes from FERC’s jurisdiction 

“facilities used for the generation of electricity or over facilities used in local 

distribution or only for the transmission of electric energy in intrastate commerce, 

or over facilities for the transmission of electric energy consumed wholly by the 

transmitter.” States, conversely, have ample authority to require the use of specific 

types of electricity generation and demand-side sources for their retail customers 

but not to directly regulate wholesale rates. 
14

payee is a participant in the wholesale market. Order 745-A P 31. The effect is on 

the wholesale markets: reducing demand for wholesale electricity, thereby 

affecting wholesale rates by reducing the wholesale price. Order 745-A P 23 & 

n.51 (describing findings that wholesale demand response benefits wholesale 

markets); Order 745 P 47. 

Nor do the Orders directly regulate retail demand response. Cf. Order 745-A 

P 71 (finding that the Final Rule does not directly affect retail-level demand 

response programs); Order 745 P 108 (the disconnect between wholesale and retail 

prices prevents the effect of wholesale demand response—reducing wholesale 

pricing—from automatically passing directly through to the retail price). As a 

factual matter, the regulated transaction is a wholesale transaction, and the Orders 

establish the rules governing that transaction. 

Generators would have the Court believe that because retail customers 

choose to become involved in wholesale demand response (whether directly or 

indirectly) and reduce their retail consumption, the transaction is somehow 

transformed into something akin to a retail sale. Generators are wrong for many 

reasons. 

First, Generators’ premise that Order 745 requires payments to “retail 

customers,” Gen. Br. 28, is incorrect. In fact, many wholesale demand response 

resources are not retail customers at all. They are third-party aggregators of retail 
15

customers. It is they, and not the retail customers, who would be compensated 

directly under Order 745. And when a third-party aggregator pays a consumer, the 

Orders are not regulating that transaction. Moreover, even if a wholesale demand 

response provider is also a retail customer—say, a large industrial company—it is 

not acting in its capacity as a retail customer when it provides demand response 

into the wholesale market. That an entity participates in the retail markets for one 

purpose—buying electricity—does not mean that every other transaction in which 

the entity participates becomes a retail transaction. 

The same entity can be subject to FERC’s jurisdiction for some transactions 

and not for others. See, e.g., Mississippi Power & Light Co. v. Mississippi ex rel. 

Moore, 487 U.S. 354, 357 (1988) (noting that the same companies were engaged in 

both wholesale and retail sale of electricity, that the wholesale transactions were 

governed by agreements filed with FERC, while the retail sales were governed by 

local agencies); New York v. FERC, 535 U.S. 1, 11, 23-24 (2002) (holding that, 

FERC had jurisdiction over retail transmission, even though the transaction 

involved retail customers). Here, though customers’ retail purchases are subject to 

State jurisdiction, compensation for the demand response they bid into the 

wholesale markets is subject to FERC jurisdiction. 

Second, retail sales—the kind of transactions clearly outside FERC’s 

jurisdiction—occur in the retail markets regardless of whether demand response is 
16

dispatched. Customers, even if they are end-users permitted to participate in the 

wholesale market as a demand response resource, must buy their electricity on the 

retail market. Those retail sales of electricity continue to be regulated by the 

States, and Orders 745 and 745-A do not regulate the price or operation of those 

retail sales. The retail sale and demand response transactions are separate, even if 

the same entity is a party to both transactions. 

Generators gain no more traction from the prefatory language in Section 

201. The language is declaratory, stating simply that FERC’s jurisdiction shall 

“extend only to those matters which are not subject to regulation by the States.” 

FPA § 201(a), 16 U.S.C. § 824(a). The “state powers” language in Section 201(a) 

is a “mere policy declaration that cannot nullify a clear grant of jurisdiction, even if 

that particular grant seems inconsistent with the broadly expressed purpose.” New 

York, 535 U.S. at 22. “Because the FPA contains a clear and specific grant of 

authority to FERC over [practices affecting wholesale rates], the prefatory 

language . . . does not undermine FERC’s jurisdiction.” Id.

FERC has carefully avoided intruding on retail demand response programs 

run in retail markets. Order 745 P 114 (the Commission “is not regulating retail 

rates or usurping impending state regulatory efforts concerning demand 

response.”); Order 745-A P 71. The transactions the Orders do regulate are 
17

wholesale transactions affecting wholesale rates, not retail transactions, and FERC 

reasonably concluded that they fall within the Commission’s jurisdiction. 

B. Demand Response Should Be Compensated at LMP Because 

Demand Response Affects Wholesale Rates and Encouraging 

Demand Response Provides Energy, Public Health, and

Environmental Benefits 

FERC’s decision to require compensation of wholesale demand response 

resources at LMP must be sustained unless it is “arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with the law.” 5 U.S.C. § 706(2)(A); see 

also B & J Oil and Gas v. FERC, 353 F.3d 71, 75 (D.C. Cir. 2004) (applying 

arbitrary and capricious standard of review to challenge to FERC order). Judicial 

review of “issues of rate design are fairly technical and, insofar as they are not 

technical, involve policy judgments that lie at the core of [FERC’s] regulatory 

mission.” Electricity Consumers Resource Council v. FERC, 407 F.3d 1232, 1236 

(D.C. Cir. 2005). FERC’s decision to compensate at full LMP is exactly the kind 

of technical and policy decision that deserves deference. LMP is appropriate 

because demand response affects wholesale generation rates and because it will 

encourage the development of demand response, which is an important policy 

decision. Encouraging demand response will lead to a host of health and 

environmental benefits. FERC’s Orders should be sustained. 
18

1. Compensating Demand Response at LMP Will Encourage 

Its Development 

All parties and amici seem to agree on the “critical importance of efficient 

price signals in competitive markets.” Br. of Robert L. Borlick, Joseph Browning, 

et al. as Amici Curiae in Support of Petitioners, filed June 13, 2012, at 3 (Doc. No. 

1378605). In a world of textbook economics, with efficient price signals, the 

wholesale price (LMP) would more closely approach the retail price (G). In such a 

world, where LMP equaled G, retail consumers would cut their electricity use if 

and only if doing so would benefit them, and by saving electricity and not paying

for that electricity they would save an amount equal to LMP, which would be the 

same as the retail rate (G). 

But we do not live in a world of textbook economics. In the real world, 

wholesale and retail prices are disconnected and far from equivalent. Order 745-A 

PP 58, 59. “Paying LMP to demand resources will help address the lack of direct 

connection between wholesale and retail prices and the lack of dynamic retail 

prices by providing those customers that can respond to price signals with accurate 

market price signal for such response.” Order 745-A P 61. Part of removing those 

barriers requires compensation greater than LMP-G. 

In addition, compensation at LMP does not improperly subsidize demand 

response resources because the Orders do not permit compensation unless the net 
19

benefits test is satisfied. See Order 745 P 47. Under that test, demand response 

resources will be paid LMP only when “the nature of the supply curve is such that 

small decreases in generation being called to serve the load will result in price 

decreases sufficient to offset” the cost of acquiring the demand response resources. 

Order 745 P 80. The test helps ensure that demand response is, in fact, comparable 

to supply when it is compensated. 

Compensating demand response resources at LMP “will encourage more 

demand-side participation.” Order 745-A P 61; see also id. P 62 (“Paying the full 

marginal value of energy to demand response will provide the proper level of 

investment resources available for capital improvements.”). Encouraging demand 

response is an important policy decision within FERC’s administrative expertise, 

as we explain below. FERC appropriately considered real world markets, the 

policy value of demand response, and resolved differing views between economic 

experts, finding that LMP is the appropriate compensation. See, e.g., Electricity 

Consumers Resource Council, 407 F.3d at 1236 (judicial review of “issues of rate 

design are fairly technical and, insofar as they are not technical, involve policy 

judgments that lie at the core of [FERC’s] regulatory mission,” and this Court 

defers to FERC’s resolution of disputes between experts). The Court should defer 

to FERC’s decision. 
20

2. The Value of Demand Response Is At Least as High, If Not 

Higher, Than Supply Because It Reduces Externalities and 

Social Costs 

FERC premised its decision to require wholesale demand response resources 

to be compensated at LMP, the same rate as suppliers, on the well-supported 

determination that both supply and demand resources provide a comparable service 

to RTOs and ISOs for purposes of balancing supply and demand and maintaining a 

reliable electricity grid. Order 745 P 47; Order 745-A PP 58, 60, 73. Comparable 

treatment is the right standard, particularly because wholesale demand response 

actually provides a number of public interest benefits that make it even more 

valuable than supply. FERC is entitled to consider these benefits to the public 

interest. Elizabethtown Gas Co. v. FERC, 10 F.3d 866, 872 (D.C. Cir. 1993) 

(FERC “has wide discretion to balance competing equities against the backdrop of 

the public interest”). 

To fully appreciate the value of wholesale demand response, one must 

recognize that it usually becomes competitive in the energy market during peak 

hours of demand. When demand peaks, wholesale markets must dramatically 

increase supply in order to keep up with the demand—unless demand response is 

deployed. Meeting peak demand with supply alone causes a number of serious 

challenges and adverse impacts that that demand response can help avoid or 

minimize. 
21

 At peak times in a particular location, it may be literally impossible to add 

marginal units of energy due to congestion on the transmission grid.12 At such 

times, marginal units of demand response may be uniquely able to balance 

marginal units of demand. 

 Even though electricity cannot at present be stored efficiently, the grid must 

reliably supply electricity at all times, even during periods of peak demand. The 

grid meets high demand largely with “peaking units,” power plants that operate 

only when demand is close to its peak.13 Peaking units may run only for a 

relatively small number of hours each year,14 but the system still needs to build 

them to provide power during those peak times. Building and maintaining peaking 

units requires extensive economic investments in generation and transmission 

infrastructure. 

 

12 See, e.g., U.S. Dep’t of Energy, National Transmission Grid Study (May 2002) at 

p. 41, available at http://energy.gov/oe/information-center/library/reportsdocuments#demand (discussing bottlenecks in transmission lines that demonstrate 

physical limits of system, and explaining how demand response can relieve such 

bottlenecks); U.S. Dep’t of Energy, Benefits of Demand Response in Electricity 

Markets and Recommendations for Achieving Them (February 2006) at ix-xi, 

available at http://eetd.lbl.gov/ea/ems/reports/congress-1252d.pdf (explaining that 

demand response programs are established so that the load can be reduced when 

the grid becomes unreliable).

13 MIT, The Future of the Electric Grid app. B at 259 (2011).

14 Id.
22

Demand response can reduce the need for these peaking plants by lowering 

total peak demand. Indeed, FERC’s assessment of demand response potential 

indicates that the highest level of demand response could level demand between 

2009 and 2019, the last year of FERC’s analysis horizon.15 The 2019 peak load 

could be reduced by as much as 150 gigawatts (GW), compared to the business-asusual scenario. Id. The current FERC-approved cost estimate for a peaking plant 

is $112,868 per MW-year. Using this estimate, the projected 2019 peak load 

reduction of 150 GW would result in approximately $17 billion in cost savings in 

2019.16

 In addition to saving money, avoiding the construction of these peaking 

plants provides important societal benefits. Peaking plants are frequently built 

 

15 FERC, National Assessment of DR Potential (June 2009) , available at

http://www.ferc.gov/legal/staff-reports/06-09-demand-response.pdf.

16 In re PJM Interconnection, L.L.C., 139 FERC ¶ 61,031 at pp. 2-3 (2012). 

Another example further demonstrates how demand response can reduce the need 

to build plants. In Texas, if demand response participation reached the estimated 

achievable participation, it would more than cover the reserve margin needed to 

meet contingencies such as extreme weather—without the need to build new 

plants. See ERCOT, New Report Reinforces Future Electric Resource Adequacy 

Concerns (May 22, 2012), available at

http://www.ercot.com/news/press_releases/show/518 (target planning reserve 

margin is 13.75%); The Brattle Group, ERCOT Investment Incentives and 

Resource Adequacy (June 1, 2012) at 90, available at 

http://www.ercot.com/content/news/presentations/2012/Brattle%20ERCOT%20Re

source%20Adequacy%20Review%20-%202012-06-01.pdf (potential for 

achievable participation in demand response is 15% of capacity, greater than 

reserve margin).
23

near major populations, where the air pollutants they discharge do disproportionate 

harm to public health. The National Academy of Sciences estimates the health 

costs of peaking plants at $3 million per plant per year.

17 Using demand response 

to avoid nearly 2,000 new peaking plants could avoid health costs in the range of 

$4 or more billion annually.18

Demand response also can reduce the need to dispatch energy from existing 

peaking plants, which have disproportionate public health and environmental harm. 

Generation sources used for marginal supply at times of peak demand are among 

the oldest, most polluting, and most inefficient in the fleet. Avoiding the use of the 

10% most polluting peaking plants avoids 100-200 million metric tons of 

greenhouse gases annually, plus nitrogen oxides, and sulfur dioxide, gases that 

contribute to serious health problems and environmental problems. 19 

Demand response can also reduce the marginal cost of electricity, which 

saves consumers money and provides a cleaner, lower polluting alternative to meet 

 

17 National Academies of Sciences Committee on Health, Environmental, and 

Other External Costs and Benefits of Energy Production and Consumption; 

National Research Council, et al., The Hidden Costs of Energy: Unpriced 

Consequences of Energy Production and Use, available at

http://www.nap.edu/catalog.php?record_id=12794.

18 National Research Council, The Hidden Costs of Energy, available at

http://www.nap.edu/catalog.php?record_id=12794. 

19 National Research Council, et al, The Hidden Costs of Energy, available at

http://www.nap.edu/catalog.php?record_id=12794.
24

electricity demand. In fact, FERC’s net benefits test provides that demand 

response providers will receive full LMP only if deploying demand response 

lowers the wholesale prices by an amount greater than the payments to the demand 

response providers. With sufficient wholesale demand response, the market will 

clear at lower prices than the high polluting, more costly generators’ bids.20 When 

demand response meets peak demand, it can lead to significant human health and 

environmental benefits.21 

Wholesale demand response also can foster the integration of renewable 

energy sources into the grid. Renewable resources, like wind and solar, vary in 

 

20 See generally Ade Dosunmu, Up in Smoke: Seven Gigawatts of Coal Retrenches 

from PJM, Energy Pulse (August 5, 2011), available at

http://www.energypulse.net/centers/article/article_display.cfm?a_id=2451 

(explaining that, at a recent auction for electricity capacity in PJM, an RTO, almost 

seven gigawatts of coal generation, enough capacity to power over 2.2 million 

homes, failed to clear the market because demand response contributed to the 

market clearing at a lower price than the coal generators’ bids). 

21 Not producing the seven gigawatts of coal-fired electricity generation that failed 

to clear the auction cited at fn. 19 above could eliminate approximately the same 

amount of carbon dioxide emissions equivalent as removing seven million 

passenger vehicles and could avoid approximately 228,000 tons of sulfur dioxide 

and 59,000 tons of nitrogen oxides. Id. The environmental and public health 

benefits of demand response are optimized where the demand response consists of 

changes in electricity consumption, rather than the use of uncontrolled on-site 

generators that may actually increase emissions and pollutants over what 

traditional supply resources would emit. 
25

their production of energy with the time of day and the weather.22 Backup power 

is necessary to meet high demand that occurs when conditions prevent renewable 

energy from meeting it. By shaving the peak load, demand response lowers the 

amount of reserves needed to support renewable energy sources.

23

 In addition, 

demand response can serve as a supply-following resource that tracks the variable 

supply of renewable energy. That is, as the supply varies, demand response 

enables demand to follow suit.24

 

Demand response also can serve as a substitute for more costly and higher 

emitting fossil spinning reserves and other ancillary services. These ancillary 

services are needed to maintain the precise balance of grid supply and demand 

during both normal and abnormal operation (for example, when a large fossilfueled plant trips off line). Wholesale demand response is a fast-acting ancillary 

service, which permits it to respond to short-term variation in electrical demand 

 

22 Shelley Welton, MIT Study Demonstrates Demand Response’s Role in 

Balancing Renewables, Columbia Law School Climate Law Blog (December 15, 

2011), available at http://blogs.law.columbia.edu/climatechange/2011/12/15/mitstudy-demonstrates-demand-response%E2%80%99s-role-in-balancingrenewables/ (citing The Future of the Electric Grid, MIT Energy Initiative, 

http://web.mit.edu/mitei/research/studies/the-electric-grid-2011.shtml). 

23 MIT, The Future of the Electric Grid.

24 See, e.g., MIT, Future of the Electric Grid, at p. 67 available at 

http://web.mit.edu/mitei/research/studies/the-electric-grid-2011.shtml.
26

from both normal and abnormal operations. See Order 745 P 10 n.20 (providing an 

example of how demand response can quickly re-balance a system).25

Utilizing wholesale demand response can help maximize the use of existing 

generation and transmission facilities and infrastructure. By reducing demand 

during peak times, it can shift that demand to periods when facilities would 

otherwise be underutilized. This includes shifting demand to resources such as 

wind, which would otherwise have to be curtailed without sufficient demand. 

Existing ancillary services and reserves specifically designed to respond to large, 

infrequent ramps, which are slower than conventional contingencies, are 

important.26

Deploying demand response in the wholesale market can help avoid the full 

suite of costs associated with new peak electricity generation facilities and the 

accompanying transmission infrastructure. As with generation, transmission 

infrastructure involves costly economic investments and can have adverse 

environmental impacts. Depending on the scope of a transmission project and its 

 

25 See also, DeWayne Todd, Summary Remarks, Panel Discussion—Demand 

Response in Organized Markets—Barriers to Comparable Treatment and 

Solutions to Eliminate Potential Barriers (May 21, 2008), available at 

http://www.ferc.gov/eventcalendar/Files/20080521082049-Todd,%20Alcoa.pdf.

26 Michael Milligan and Brendan Kirby, Utilizing Load Response for Wind and 

Solar Integration and Power System Reliability,” Presented at WindPower 2010 

Dallas, Texas, May 23–26, 2010, available at 

http://www.nrel.gov/docs/fy10osti/48247.pdf.
27

siting, environmental concerns include potential impacts on endangered species, 

wetlands, water resources, wildlife, vegetation, and lands.27 Expansive utilization 

of demand response in the wholesale market can help prevent these impacts. 

As temperatures increase, the grid is experiencing more peak events, which 

last longer.28 For example, the hot weather in the summer of 2008 caused peak 

summer electricity demand in the U.S. to increase by 4.4 percent.29 This trend will 

only make demand response more valuable in helping to reduce peak demand. 

FERC made a reasonable decision to set the level of compensation at LMP. 

Demand response is a sound economic decision and is essential to national 

environmental and energy policy, making it eminently reasonable to set the level of 

compensation such that demand response resource will more fully develop and 

participate in the wholesale markets. As FERC explained, compensation below 

LMP will not sufficiently encourage investment and development of resources to 

 

27 See FERC, A Guide to the FERC Electric Transmission Facilities Permit 

Process 13 (updated Sept. 2010), available at http://www.ferc.gov/forcitizens/citizen-guides/electric/guide-transmission.pdf. 

28 See Oak Ridge National Laboratory, Climate Change and Energy Supply Use: 

Technical Report to the U.S. Department of Energy in Support of The National 

Climate Assessment 7, 10–11, 18, 46 (2012), available at

http://www.esd.ornl.gov/eess/EnergySupplyUse.pdf. 

29 U.S. Dep’t of Energy, Energy Info. Adm., Annual Energy Outlook 2008: With 

Projections to 2030 46 (2008), available at

http://www.eia.gov/oiaf/aeo/pdf/0383(2008).pdf.
28

realize the significant social, environmental, and economic benefits that demand 

response can provide. Order 745-A PP 59-62. 

V. CONCLUSION 

The Court should dismiss the petition for review. 

Dated: September 14, 2012 Respectfully submitted, 

/s/Vickie L. Patton

Katherine Mayer Mangan 

MAYER MANGAN, PLC

10755 Scripps Poway Parkway, Ste. 367 

San Diego, CA 92131 

Tel. 858-397-6234 

Email: kate@mayermangan.com 

Vickie L. Patton 

General Counsel 

ENVIRONMENTAL DEFENSE 

FUND 

2060 Broadway 

Boulder, CO 80302 

Tel. (303) 447-7215 

Email: vpatton@edf.org 

Elizabeth B. Stein 

Attorney 

ENVIRONMENTAL DEFENSE FUND 

257 Park Avenue South 

New York, NY 10010 

Tel. (212) 616-1327 

Email: estein@edf.org 

John Finnigan 

Senior Regulatory Attorney 

ENVIRONMENTAL DEFENSE 

FUND 

128 Winding Brook Lane 

Terrace Park, Ohio 45174 

(513) 509-3339 

Email: jfinnigan@edf.org 

Counsel for Amicus Curiae Environmental Defense Fund

Orijit Ghoshal 

CITIZENS UTILITY BOARD 

309 West Washington, Suite 800 

Chicago, Illinois 60606 

Tel. (312) 263-4282 ext. 124 

Email: oghoshal@citizensutilityboard.org 

Counsel for Amicus Curiae Citizens Utility 

Board 

John N. Moore 

Senior Attorney-The Sustainable 

FERC Project 

NATURAL RESOURCES 

DEFENSE COUNCIL 

2 North Riverside Plaza, Ste. 2250 

Chicago, IL 60606 

Tel. (312) 651-7927 

Email: jmoore@nrdc.org 
29

Counsel for Amicus Curiae 

Natural Resources Defense 

Council 

 
30

CERTIFICATE OF COMPLIANCE 

In accordance with Federal Rule of Appellate Procedure 32(a)(7)(C) and 

D.C. Circuit Rule 32, I certify that the accompanying brief has been prepared using 

14-point Times New Roman typeface. I further certify that the accompanying brief 

complies with the type-volume limitations of Rule 32(a)(7)(B). The brief is 

proportionately spaced, and contains 6,086 words, exclusive of the table of 

contents, table of authorities, signature lines, and certificates of service and 

compliance. 

Dated: September 14, 2012 Respectfully submitted, 

 /s/Vickie L. Patton

 Vickie L. Patton 
31

CERTIFICATE OF SERVICE

 I hereby certify that I electronically filed the foregoing with the Clerk of the 

Court for the United States Court of Appeals for the District of Columbia Circuit 

by using the appellate CM/ECF system on September 14, 2012. 

 I certify that the following parties in the case are registered CM/ECF users 

and that service on those parties will be accomplished by the appellate CM/ECF 

system. 

 

 /s/Vickie L. Patton

 Vickie L. Patton