The Supreme Court has agreed to decide whether FERC may regulate “demand response” payments offered to electric utility customers to reduce their electricity use during periods of high demand in the consolidated cases of FERC v. Electric Power Supply Association, and EnerNOC Inc. v. Electric Power Supply Association. Per the Federal Power Act, FERC regulates the wholesale sale of electric energy. States regulate the retail sale of electric energy. FERC argued that demand response affects wholesale prices. The D.C. Circuit agreed but responded that FERC offered no limiting principle. The price of steel, fuel, and labor also affect the wholesale price of electricity but FERC can’t regulate them. According to the D.C. Circuit, “Demand response—simply put—is part of the retail market. It involves retail customers, their decision whether to purchase at retail, and the levels of retail electricity consumption. The Court will also decide whether compensation level for demand response are too high.